Home Equity Loan on Non-Owner Occupied Rental

[Sheila Mathers]

My husband and I own three duplexes that we rent out. They are all paid off. We are retired, and the rents are how we derive income. We also own our residence outright. Our credit scores are in the 800 range. Our bank statements show that we bring in a little less than $10,000 a month, but our tax returns show a lot less because of deductions and allowed depreciation.

My question is this: We would like to do some remodeling to our residence and were thinking about taking out a loan on one of our rental properties. The property I had in mind is worth about $630.000 and the amount we would need is about $120,000. Because of this being rental income and our tax returns showing what they do, are our only options private portfolio lenders? I've talked to a couple, and I know that is a possible route, but their rates are a little bit higher than I want to pay if possible.

Any thoughts? Has anyone had a good experience with a bank or credit union with this similar scenario?  Or would we have to take less deductions and beef up our tax returns and then try to get a traditional loan?

My husband says to just wait and we can save up the money, but I sure would like to remodel sooner than later.