I get where you’re coming from, but I’d actually push back a bit on the idea that local lenders are always more flexible. Sometimes they’re just as strict—if not more—because they don’t have the same risk tolerance as the big banks. I’ve seen some credit unions and small-town banks go over every line of a statement with a magnifying glass, especially if your credit isn’t top-tier.
That said, you’re spot on about underwriters being obsessed with consistency. The credit score is just one piece; they want to see stable income and predictable spending. The part you mentioned about writing a letter for a Venmo transfer?
That’s become pretty standard now, unfortunately. Any “unusual” deposit gets flagged, even if it’s just birthday money or splitting dinner.I had to write a letter about a Venmo transfer from my brother, which felt a little over the top.
Honestly, I think it’s less about the lender and more about the regulations everyone has to follow these days. Non-traditional income is always going to be a headache unless you can document it six ways from Sunday. It’s frustrating, but I wouldn’t count on smaller lenders being much looser anymore.
Yeah, I’ve noticed the same thing lately. People always say to “try the little local banks, they’ll work with you,” but in my experience, they can be even more by-the-book than the big guys. Maybe it’s because they don’t have as much wiggle room if something goes sideways? Either way, I had a credit union ask me to explain a $60 deposit from my mom once—like, sorry for having a birthday, I guess.
The Venmo letter thing cracks me up and annoys me at the same time. I mean, who hasn’t gotten paid back for pizza or whatever? But yeah, if it doesn’t fit their neat little boxes, suddenly you’re writing essays about your finances.
Honestly, unless you’ve got super clean credit and W2 income, it just feels like you’re jumping through hoops no matter where you go. The rules are the rules and nobody wants to stick their neck out. I’d love to see things loosen up a bit for folks who are self-employed or have side hustles, but I’m not holding my breath...
I totally get what you mean about the hoops. I’ve been wondering—has anyone actually had better luck with online lenders or mortgage brokers versus walking into a bank or credit union? I keep hearing mixed things, but I’m not sure if it’s just marketing hype.
Honestly, I think the whole “online lenders are easier” thing is a bit overblown, especially if your credit isn’t spotless. There’s this idea floating around that online lenders or brokers are more flexible, but in my experience, the actual requirements don’t change much. They might have slicker apps or faster pre-approvals, but when it comes down to underwriting, they’re still looking at the same credit scores, debt-to-income ratios, and documentation as the banks or credit unions.
I went through a broker last year thinking they’d have some magic workaround for my mid-600s score. Nope. The process was just as thorough—maybe even more so, since they were shopping my info around to different lenders. I had to explain every little blip on my credit report. It felt like just as many hoops, just online instead of in person.
Credit unions can actually be a little more forgiving sometimes, depending on your relationship with them. I know a couple people who got decent rental property loans because they’d been members for years, even with less-than-perfect credit. Not saying it’s a guarantee, but it’s worth considering if you already bank somewhere local.
At the end of the day, I think it’s less about the channel—online, broker, or brick-and-mortar—and more about your overall profile. If your credit has some dings, you’ll probably face similar scrutiny no matter where you go. The main difference is maybe in how user-friendly the process feels, not how strict the criteria are.
Just my two cents from bouncing between all three options... None of them really felt like a shortcut.
- 100% agree, the “online = easy” thing is mostly marketing.
- In my experience, the only real shortcut is having a solid relationship with a lender—credit union or local bank. They’ll sometimes look past a few dings if you’ve got cash reserves or a good history with them.
- One thing I’ve noticed: some lenders care more about rental property experience than just credit score. If you’ve managed rentals before and can show steady income from them, it seems to help offset a less-than-stellar score.
- Curious—has anyone here had luck with portfolio lenders? I’ve heard they can be more flexible since they keep loans in-house, but I haven’t tried them yet.
