To portfolio loan or not portfolio loan.

[Chris Lohmeier]

I'm shopping for lenders on a new purchase and came across a question I want to run across the great minds here. The property I'm looking at purchasing is a SFR for $86k. My usual credit union has already approved me for a loan at 5.5% with 20% down, 5 year balloon, and 20 year amortization, which is pretty standard from what I am seeing in my area.

Another local bank has offered me a portfolio loan that includes three of my other recently purchased properties. The approximate numbers on those loans are as follows.

• 1.$56k, 5.5%, ~4 years left on balloon, 20 yr am.
• 2.$98k, 5.0%, ~4.5 years left on balloon, 20 yr am.
• 3.$63k, 5.5%, ~5 years left on balloon, 20 yr am.

The second bank would let me purchase the new property with no money out of pocket by wrapping up the other loans at 5.25-5.75%, with a five year balloon, and 20 yr am.

I have a good credit score, even though all the new loans are hurting my length of history numbers, so I’m pretty confident I would qualify for the 5.25% rate.

My question is what would you do? Do I wrap everything together, or hold them apart for a little longer and let them season a bit more. I like the idea of not having to put anything down on the new house as a 20% down payment would require I dip into personal funds in order to maintain proper reserves within my rental funds.

Additional information:

My current credit union is very small, if I want to expand much further I will have to look elsewhere anyway.

The new unit and one of the units above are long term holds that I have no interest in selling. One of the other two is a sure sell within the next five years or so, unless the current tenants stay longer. The final one falls somewhere in between.