As a mortgage broker, you may have come across clients that want to know everything about investment property loans. While most residential brokers avoid investment property loans, they miss out on a great business opportunity.
What Residential Brokers Know
Most residential brokers know the basic requirements of a home mortgage loan, such as debt-to-income ratio, credit score requirement, the process of income verifications, documents buyers need to qualify for residential properties and insurance premiums.
Governmental ventures like Freddie Mac and Fannie Mae guarantee and purchase lenders’ home mortgages and establish documentation and underwriting guidelines to minimize risks. Most of these home loans fall under the Freddie Mac and Freddie Mae underwriting guidelines.
When you focus on property mortgage loans, you become familiar with the Government- Sponsored Enterprise loan requirements and thus being difficult to explore more mortgage industry alternatives.
Who Offers Investment Property Loans?
Most commercial property investors get loans from banks, conduits, non-bank financial lenders, and wholesale. Most banks, conduit, and wholesale lenders sell their loans to Government-Sponsored Enterprises(GSEs).
They sell at lower rates, but they have to abide by GSEs’ strict underwriting guidelines, including giving borrowers detailed documentation of their credit and income history. There is also a limitation to GSEs’ investment property loans, and only multi-family buildings and residential receive the loans.
Can Small Business Owners or Self-Employed Investors Receive Investment Property Loans?
Getting or qualifying for a GSEs investment property loan as a small business owner or self-employed may be difficult. The best way to be eligible for an investment property loan as a small business owner is to get the loans from a portfolio lender that doesn’t sell loans to the bank or GSE.
Advantages of Getting Investment Property Loans from a Non-Bank Portfolio Lender
As non-bank portfolio lenders don’t sell loans to the bank or Government-Sponsored Enterprises, they have the opportunity of establishing their underwriting guidelines with an asset-based approach for the loans.
Inspire Business Capital is a national lender based in Austin, Texas. but we lend in every state. We lend people, typically looking for alternative financing that a traditional bank cannot provide. Visit our website today to learn more http://inspirebusinesscapital.com
