Reader Question: I have two rental properties free and clear but having hard time borrowing money using these properties because of low credit score. It is 620. Any suggestions or lender who may work with me?
-Shalaish Pathak
Monty’s answer to the real estate investor question of the week
Monty’s Answer: Hello Shalaish and thanks for your question. Lenders for rental property will be extremely skeptical with borrowers who do not have stellar credit. That said there may be lenders willing to lend to you.
If you do find a lender, they will want to know what caused your low credit score. They will also not lend you as much as they would lend a person who has a high credit score. They will also charge you a higher interest rate, until you can prove you have become reliable. They do this because managing an account where they must send reminders, call or even visit your home is expensive.
Go to the internet and do a search for “hard money lenders.” I suspect a number of them will pop-up on your search results. You also may be able seach for a lender by searching for “poor credit mortgage loans.”
I did that on my computer and many appeared. Here is the first lender that came up. There are many of them. We are not endorsing the link I sent to you. I only did that as an example to test my suspicion that these lenders exist. You will have to do your own due diligence.
I hope you find this information helpful, Shalaish.
Respectfully,
Richard Montgomery
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