Top 5 Investment Property Lenders for 2022
Investors can choose from traditional mortgages, mortgage brokers, DSCR financing, and portfolio financing options to purchase real estate investments. Learn more about who offers each of those options.
At Awning, we’ve seen investors get great results from price shopping lenders for the best rates and promotions. We don’t accept compensation from these lenders for referring investors, instead we negotiate promotions to save you money.
Top Investment Property Lenders
- Beeline: Conventional and DSCR financing with free appraisal and $1,000 lender credits or gift card and simple application.
- Better: Online pre-approval for conventional and $2,000 off closing costs.
- Matador: Conventional and hard money loans with waived appraisal fee.
- Conventus: Portfolio refinancing and hard money loans.
- LoanDepot: Conventional financing with hands-on loan officer.
Types of Investor Financing and March Interest Rates
- Conventional: 4.25% - 4.75% : Traditional mortgage with amortized interested payment. Requires sufficient personal income, credit history, and a low debt-to-income ratio. Approval subject to property inspection.
- DSCR - 4.75%: 5.25% : Debt-service coverage ratio is financing based on the income of the property. Borrower qualifications still matter, but this type of financing is growing increasingly popular with investors.
- Hard Money: 4.75% - 7% : A high interest, short-term loan intended for purchasing properties and rehabbing them quickly. This is a form of bridge financing and is usually used in limited circumstances.
- Portfolio refinancing: 3.5% - 4.5% : A loan based on an entire portfolio of properties usually used to extract capital in anticipation of reinvestment. Used by investors with substantial portfolios to simplify the refinancing process.
At this time rates are volatile and changing on a daily basis. These rates were solicited from partners on March 1st, 2022.
Beeline: Accurate Pre-approvals & DSCR Financing
Beeline is an online lender headquartered in Rhode Island and founded in 2019. The company strives to simplify the loan application process and put money into the hands of borrowers.
Beeline customers can finance properties in 26 states, including Alabama, California, Florida, Georgia, North Carolina, and Texas.
Investors can get a conventional mortgage or complete a refinance at competitive rates with Beeline. They can also get a unique debt-service coverage ratio (DSCR) loan.
DSCR financing is based on the ability of an investment to cover debt payments, so the financing is based on the income of the property. Investors that struggle to qualify because of income can use this option. Given the higher risk of this loan type, rates are 0.75% - 1.25% higher than conventional financing options.
Investors can apply online by connecting Beeline to bank accounts and tax statements for a more accurate pre-approval process. Connections take about 15-minutes and Beeline will assign a loan specialist to each borrower.
Beeline offers up to $700 off of the appraisal fee and $1,000 lender credit or gift card to Awning customers. Published Beeline reviews and the feedback from Awning advisors and investors show Beeline is a reliable lender. The company has great customer service and a sound track record of financing investor deals.
Better Mortgage: Quick Conventional Mortgages
Better Mortgage, otherwise known as Better.com, launched in 2014 with headquarters in New York City’s financial district. SoftBank backs the company, and the lender has funded $14 billion in loan volume in the Q1 of 2021. Better Mortgage provides conventional financing and refinancing in 47 states and Washington D.C. The only states where Better Mortgage is not available are Hawaii, Nevada, and New Hampshire.
Investors can qualify for a conventional mortgage or refinance with Better and receive a pre-approval in a few minutes. The application takes into account credit, income, existing debt, and other factors.
To apply, investors must submit some basic identifying information and consent to a soft credit check. This is an advantage over some other lenders, since it protects the credit report from hard checks, which could reduce the score. The initial application takes three minutes, after that Better requests additional documents to complete the underwriting process. Better pairs investors with a licensed mortgage broker that works on the loan with the customer. While Better’s mortgage brokers are well-equipped, they are not only focused on a single customer, nor are they experts in real estate investment lending.
Better is offering a $2,000 discount to Awning customers, to be deducted from closing costs. Reviews by Better borrowers are very positive and the internal experience with Awning advisors and investors that have used the service reinforced this.
Matador: Rate Comparisons With One Call
Matador, an independent mortgage broker that partners with 100’s of lenders, was founded in 2019 by experienced mortgage professionals and is based in Houston, TX. The company can lend in Alabama, California, Georgia, Florida, Texas and other major markets.
Investors can qualify for conventional financing and hard money loans from Matador. Matador is also a great way to rate shop without submitting a huge number of applications, since the company works with multiple lenders. Costs, terms and qualifications are standard for their conventional financing, making them a worthwhile consideration for rate comparison.
Hard money loans are short-term bridge loans secured by property. Borrower qualifications matter less and the property that is being used as collateral is more important. Real estate investors use these loans for fix-and-flip investments, but can also use them to create “cash offers” and win investments that were otherwise out of reach. The largest downside is that the loans come due in 6 to 18 months, and have interest rates of +3% to +12% over conventional financing rates.
Investors can enter their contact information with Matador and receive a call to discuss financing options with a licensed mortgage broker. Depending on the deal, Matador can provide investors with financing pre-approval in a few hours to a few days.
Awning customers receive a waived appraisal fee of $700 from Matador. Reviews of Matador are very positive and further reinforced by the experience of our investors and advisors, who often turn to the mortgage brokers for their resourcefulness.
Conventus: Portfolio Financing & More
Conventus is a private lender started in 2015 by Keith Tamao, a former Managing Director at Goldman Sachs. The company is based in California and can lend in Alabama, California, Florida, Georgia, Texas and other states.
Conventus offers financing, rehabbing, and refinancing solutions. The company also offers portfolio refinance options and hard money loans.
By working with a contact at Conventus, Sean, investors can receive the personal attention that is important for executing complex financing scenarios. The typical process varies, but Conventus shared that many investors purchasing a long-term rental can expect to close in 30-45 days, which is faster than some other lenders.
Conventus is not offering any promotions to Awning investors. Reviews of Conventus are available online and are very positive.
LoanDepot: Personal Attention for Conventional Financing
LoanDepot was founded in 2010 and as of 2020, the company broke $100 billion in mortgage originations for the first time. It’s the second-largest non-bank mortgage loan originator in the United States and can lend nationwide.
LoanDepot is best for quick pre-approval conventional financing. Awning has a relationship with Paul Kusnierek, a hands-on loan officer, that has experience working with investment property clients.
Aside from the personal service, the rates, terms and qualifications for mortgages from LoanDepot are competitive with the market.
LoanDepot doesn’t offer any current promotions to Awning customers. Investors can find a significant number of reviews for LoanDepot online.
Many investors work with an Awning financing partner to finance an investment property, however, we encourage you to shop around with different lenders not on this list as well. The important thing for an investor is to get the right rate and terms. The advantage that a partner lender provides is that Awning advisors have a direct line of communication with the company and can escalate if any issues or opportunities present themselves.