Lending after 10 Mortgages

[Deanne Bourne]

I am now being told I have reached my limit in this residential "type" of mortgage product (20% down, 30 yr conventional) The lenders and my realtor both say I need to go to the next step, a portfolio loan.  It was described to me as using multiple properties as collateral and then using the money as needed.  Can someone go into detail about how this is accomplished?  Do I call a banker or a lender and say I want to put up 6 properties for a line of credit of $xx,000?   What banking or lender does that type of package?  I have talked with a bank that did a $500,000 refinance on one property which they called a portfolio loan.  It was a slightly higher rate of interest, 25 years amortization and a 6 year adjustment period.  I refinanced it asap. 

    I am programed to the 30 year conventional at this point and when I do mortgage calculations with 20 or 25 yr amortization periods I know the mortgage will take a bigger bite out of my profits.  Maybe I don't have my description right so correct me if I am wrong.

[Eric Johnson]

Hi, at this point you'll want to go commercial. You can get 30 year fixed or something like a 5/1 Hybrid arm (fixed for 5 years then adjusts based on an index after 5th year w/ a ceiling and lifetime cap). 5/1's usually have a lower interest rate by about 10-30bps (basis points). 

There is no limit to how many properties you can finance, since it is asset-based. Common asset-based pricing right now is around 4.85-5.75%. Hope this helps.