How do I get long term loan on rentals

[Kip Cline]

What is the best way to get long term fixed rate mortgages on rental property. I have several rental properties that I paid cash for and I would like to refinance into 15-30 year fixed rate mortgages.  Banks I have talked with want to do mortgages with 5 year balloons. Is there a way to get 15-30 year fixed rates.

[Andrew Postell]

@Kip Cline those 5 year balloon mortgages are what we call in the lending industry "portfolio" loans...sometimes they are called "commercial" loans.  The best long-term loan for a 1-4 unit property is a "conventional" loan.  Conventional loans are governed by Fannie Mae and Freddie Mac (if you recognize those federal agency names) and a portfolio loan is governed by the bank (their own portfolio of money).  There are pros and cons to everything and conventional loans are no different.  So while a portfolio loan could have a 5 year balloon, it might be easier to qualify for.  A conventional loan will have a 30 year fixed rate, but have a lot more paperwork with it.  Speak with smaller to mid-sized banks for the best terms on conventional loans on investment properties (do not use large, national banks for investment properties) and talk through your scenario to see if you can qualify, etc.  There are portfolio loans out there that have 30 year fixed rates...but as a previous post suggested you will have to call around.  Keep in mind since a portfolio loan is governed by the bank...it's their own money...the bank right next store will govern their money differently.  So you might have to call all the banks in your area to receive all the options.  For a conventional loan, banks have pretty close to identical terms since it's not our money but Fannie and Freddie money.  I hope this helps but feel free to ask more if needed.  Thanks!