Portfolio lenders are kind of the unicorns in this space, honestly. I’ve had mixed results—one local bank was super flexible, looked at my rental history and cash flow more than my credit score, but another just had a different set of hoops to jump through (more paperwork, higher rates). The “in-house” thing does mean they can bend their own rules a bit, but it’s not a guarantee they’ll actually do it.
I totally agree that experience as a landlord matters. I showed one lender my rent rolls and leases, and that seemed to carry more weight than my credit blips from a few years back. If you can prove you’re not just a weekend warrior and actually know how to keep tenants happy and properties running, some lenders get a lot more comfortable.
I’d say, don’t write off the small banks or credit unions. The big online guys are convenient but not always as forgiving if your credit isn’t shiny. Sometimes it feels like they just run your numbers through a robot and spit out a “nope.” Local folks at least listen for a minute.
I get where you’re coming from about local banks, but I’ve actually had better luck with some of the “robot” lenders. They’re strict, yeah, but at least you know exactly what to expect—no surprises or random extra paperwork. Sometimes the personal touch at small banks just means more hoops, not more flexibility. Maybe it depends on the area or the loan officer, but I wouldn’t write off the online guys completely.
I’ve noticed the same thing—those online lenders can be refreshingly straightforward, especially if your credit isn’t spotless. The process is rigid, but at least you know where you stand and what’s needed upfront. I’ve seen clients get tripped up by small banks asking for last-minute docs or changing terms mid-process. That said, sometimes a local lender will bend a bit more if you have a relationship or unique circumstances, but it’s hit or miss. For rentals, especially with less-than-perfect credit, I’d say casting a wide net is smart... don’t count out the “robot” guys at all.
I get what you mean about the online lenders being more upfront, but I still wonder if that rigidity can backfire. Like, if your credit’s not great and you hit some weird snag in the process, do they just shut the door? With a local bank, at least there’s a chance to talk to someone and explain your situation. Not saying it always works, but sometimes a little human interaction helps.
When I refinanced last year (not for a rental, just my own place), I actually had a smoother time with a credit union than with one of those big-name online lenders. The online process was fast until they suddenly wanted extra paperwork from three years ago—stuff I didn’t even have anymore. The credit union moved slower, but at least I could call and ask questions without getting bounced around.
For rentals specifically, does anyone know if online lenders are stricter about things like debt-to-income ratios or property condition? Or is it mostly just about your credit score? I’m curious if anyone’s run into issues where an online lender said no but a smaller bank or local lender was willing to work with them anyway. It feels like there’s always some catch that doesn’t show up until you’re knee-deep in paperwork...
That’s a good point about the paperwork—online lenders can be super efficient until you hit a snag, then it’s like the system just doesn’t know what to do with you. I’ve seen clients get tripped up by things like a slightly odd property appraisal or a blip in their income history, and the online lender just flat-out declined them. Has anyone actually had a local lender overlook something like a high debt-to-income ratio if the rest of the deal looked solid? I’m always curious how much wiggle room there really is, especially when you’re not fitting into that perfect little box.
