Anyone else not seeing a problem with the credit market?

[NNN0LHI]

I called my bank today about purchasing an income property that I want to fix up and rent out.

My bank said there is no problem. They said just let them know and they will get me the money whenever I am ready for it. I need about 90 thousand dollars.

I thought I was going to have a hard time of it trying to get a loan but I am not finding this to be the case at all.

Anyone else tried and discovered this recently?

Don

[kayakjohnny]

1. Not that, per se, but they keep sending me 0% for a year like there's no tomorrow.

[mediaman007]

2. If your bank is local, they might have solid assets. A larger bank (corporate)

might have more difficulty giving you the money.

[NNN0LHI]

3. Its a local bank so maybe that is it?

[Horse with no Name]

16. That would be my guess

Our local bank has a sign out that says they have money to loan.

[Pithy]

14. I agree with mediaman007

Our bank is local and over the past 20+ years we've developed an excellent relationship with them. We're refinancing now to take advantage of the lower rates and everything has gone extremely smoothly. I think it will come down to relationship banking. The big guys obviously don't care much about the average borrower.

[Zynx]

4. I have heard many stories precisely the opposite. What is your bank?

[NNN0LHI]

6. Mainsource Bank of Illinois

[stray cat]

5. I suspect you have have a decent downpayment that makes the property good collateral?

I will be impressed if they give you 90,000 with no money down. Of course around here it would take twice that to buy an efficiency apartment.

[NNN0LHI]

10. I have a down pavement if needed but the loan officer said I didn't need one today

I was surprised myself.

I also expected to have to pay a lot higher interest rate for a loan on an income property but she said it would be the same (about 6%) as if I was purchasing a home for my primary residence.

Does that sound right?

Don

[Stinky The Clown]

7. My son and DIL just bought a house ...... no problemo

Reasonable rates. Small, but reasonable down payment.

[Xithras]

8. If you have good credit and a healthy downpayment, you can buy.

FWIW, I know many people who have purchased homes recently to take advantage of the current depressed housing market. All had solid credit histories, good long term jobs, and 5%-20% down. All of them purchased homes that cost less than a third of their incomes, and none had problems.

On the other hand, one of my students was just ranting a few weeks ago about how she and her husband couldn't get financing ANYWHERE. They had 5% down, but she's still an unemployed 20-ish college student and her husband just graduated last year. They had no long term job history, and at their age it's probably safe to assume that they have little positive credit and serious student loans weighing down their score. When I tried to point that out to her, she just looked at me and said, "But my sister and her husband bought a house straight out of college a couple of years ago."

Some banks are tight on funds and simply aren't loaning money to ANYONE, but I think a lot of it is simply an adjustment of expectations. Many people, and especially younger people who weren't around before credit was loosened, are simply used to being able to get credit any time they want it. The idea that you must have a massive down payment, a good credit score, and a few years with a single well-paying employer is out of the ordinary. It's not their fault because that's the expectation the banks have cultivated over the past few years, but that's the reality of todays situation IMHO.

[Uben]

9. I have a couple of houses to sell

The market here is really good. I want to do a contract for deed on both of them, and carry the notes myself. That way, if they default, I get the homes back to resell, and I can pocket the profit. People who can't get loans are willing to pay a little higher interest, and where would I put the money if I sold them outright?

[Jane Austin]

11. We bought a Prius about six weeks ago,

and University Federal Credit Union gave us a loan toute de suite.

Our loan officer made me think they have plenty of money.

For one thing people were spreading their cash around to bring it under FDIC coverage and they were bringing it to the credit union.

[RollWithIt]

12. What interest rate? And what is your credit?

[NNN0LHI]

13. 6%. In the 800's

[RollWithIt]

15. Lol, of course you'll get a loan, you have 800+, perfect....

Call up a GM dealership (GMAC) and tell them you have a 680 credit score, they won't finance less than 700 anymore. So someone with a 650 credit score, no bankruptcies, no hardcore debt.... they can't get a car loan right now. They'd get laughed out of a bank. I'm not saying there aren't companies who won't do business with these people, there still are, but overall the credit market is in negative decline right now. Less loans equals less business equals stagnant economy. The question is how to restructure the credit system to limit accounts. Personally, I'd like to see the credit system get a revision and separate "necessary" vs "discretionary" scoring totals. Like homes, cars, & other assets vs bullshit purchasing.

[dkf]

17. My credit union sent me a letter saying they are increasing my credit limit.

If I wanted more credit I would have asked for it. Blech.