Conventional vs. Portfolio

Are you a full-time real estate professional? Do you have income from multiple sources or multiple businesses? Do you do non-traditional leasing, for example month-to-month rather than 12-months?

If you answered yes, then you may have a difficult time getting conventional financing to purchase new property or to refinance an existing property - even one that cash flows over $2500/month. Ask me how I know.

Here are the comments from a conventional mortgage lender regarding my personal situation:

there are so many different aspects to your loan file, that it’s going to take a really long time to process and underwrite your loan file.  We can do it, but I want you to know that’s going to be no easy task.  As far as I know right now, we need to document two businesses, self-employment income, 3 rental properties, pension income, 10+ lease agreements, unconventional private mortgage, and misc odds and ends...I cannot guarantee anything at this point since your income has so many determining factors now that only when an underwriter is able to fully process your loan will we even know what we can work with. 

 And here are the comments from the portfolio lender to whom he referred me:

If you want to submit your application(s) for purchase and refinance, I will need to have your completed loans application(s), signed disclosures (2 sets if you apply for 2 loans), and application deposit of $32.33 (only 1) as requested last week.  I would also want to see a letter from you summarizing your business plan of month-to-month room rentals, including how your Oklahoma rentals are managed, etc.  This is a complex request, and while I am happy to take it on, I need your full commitment to  the process if you want a decision.  There are just too many facets and our UW will want to see the full picture. This isn't a 'quick' let me run this by you question.  We are a portfolio lender, which allows us to review requests that are out of conforming guidelines, but that sometimes means borrowers have to provide more information to support their request to help our UW's  understand their business or situation in order to take on additional/different risks.

While [your previous conventional lender] provided me with information, I cannot move forward until I have completed information from you.  We have 'lost' 5 days since I sent our application, disclosures, etc. to you. I spent part of my weekend reviewing your information and determined that this is not one that I can just 'run by' underwriting.  If you want my full attention, you will have to commit to providing everything needed to move forward.  I will be happy to do my part with a complete sense of urgency, but I need your help.

Keep asking around for other lenders. I have found a great portfolio lender at Sound Credit Bank who is happy to do my loans for me, without the hassle described above. And I am sure there are others out there. So dear readers, if you have a Seattle-area lender who has worked miracles for you, be sure to leave a comment and recommend them here.

Happy Investing!