How to Work with Banks to Fund Your Deals
Probably the most common place to get a mortgage these days is going directly to banks to fund your deals. Yes, people still do that. Now I’m not saying it’s a bad thing necessarily, depending on your situation, especially if you have a good relationship with the bank.
I talked in another post about how to use a mortgage broker, not a bank, but even the banks the mortgage brokers use are still the biggest provider of mortgages.
What the banks will do is they will look at your situation similar to what mortgage brokers do.
They will go through your statements, look at your credit score, look at the loan that you’re trying to get, look at the down payment that you have, look at your financial situation, and of course, take a look at the actual property.
The nice thing about some banks is that they have different products where you can get a line of credit instead of a mortgage.
What happens with a line of credit is that as you pay the mortgage down, the available principal now becomes available for use in other investments.
There are some unique products that banks have that they can make available to you.
The other nice thing about banks is that if you have a relationship with the bank sometimes the bank manager can help pull a few strings for you.
Another advantage is you keep all your banking in one place. You have your checking account, and your savings account, and you might even have your investments through them. Any investments in the stock market or mutual funds might go through the same bank.
If you are thinking about going to a bank to fund your deals, you want to make sure that when you go to them that they don’t give you what is called the standard rate.
A lot of banks have the option to give you a discounted rate.
So yes, banks are a good source of funds. It’s probably the number one source of funds.
The biggest drawback with banks is that usually they only provide financing for up to four houses.
So be careful when trying to use a bank that it doesn’t affect your ability to scale when looking at investing in real estate.
