Skip to main content

Mortgage Loan: How to Qualify for a Rental Property



Thinking of becoming a landlord? Thought of the prospect of buying a rental unit and letting the tenant in essence make your mortgage payment for you? Owning real estate is one of the easiest ways to increase wealth over time but there are some things you need to know in advance when considering buying a financing a rental unit. Here is what you need to know.

Conventional Only

Unless you’re financing a duplex or a 2-4 unit property and live in one of the units, government-backed financing options of VA, FHA and USDA can’t apply. Those mortgages are only for an owner-occupied property. That leaves conventional mortgages underwritten to standards issued by Fannie Mae and Freddie Mac to be used.

Down payment requirements for a rental unit are typically 20% of the sales price of the home but you can get a slightly better rate with 25% down. Interest rates on these loan programs will also be slightly higher compared to a loan for a primary residence but overall these are the only differences.

Your First

When you finance your first rental property you’ll soon discover any rental income from the property can’t be used to help you qualify. You’ll need to qualify with your income and the new mortgage along with associated property taxes and insurance. Yet with your second rental property lenders do in fact allow rental income to be used.

This is why it’s not uncommon to find an individual real estate investor who owns 10 or even 20 or more rental properties because not only can the income be used to offset the mortgage payment but also provide a nice monthly income. The only requirement at this point is to have a two year history of being a landlord and that ownership is evidenced by reviewing copies of your federal income tax returns, specifically shown on Schedule E.

That’s why real estate investors carefully review the potential acquisition to make sure the property cash flows and will not be an added expense. If the investor determines the property will indeed provide a positive cash flow, even considering an occasional vacancy, the property will soon be under contract.


 LOOKING FOR WHERE TO GET A MORTGAGE LOAN? APPLY WITH US NOW!!!
Do you need a quick loan? Apply for a loan online with us. Zion Finance - Lend Up, is an Internet-based direct-to-consumer lender. We specialize in providing loans for customers with less-than-perfect credit.

We can help you with a genuine home loan. Our loan services include personal loans, auto loans, truck loan, equipment loans, debt consolidation loans, home loans, mortgage loans, agricultural loans, small business loan and commercial business loans. Amount ranges from $3000 to $20 million. Repayment period is between 6 months to 25 years. We offer secured and Unsecured loans. Even without a collateral, we can still provide you a good loan.

To apply for a loan contact our e-mail: zionloanfirm.ltd@aol.com
Labels:

Comments

Post a Comment

Popular posts from this blog

I need a loan - Get an Instant Loan Here!

LOOKING FOR WHERE TO GET A LOAN? APPLY WITH US NOW!!! Do you need a quick loan? Apply for a loan online with us. Instant Loan, is an Internet-based direct-to-consumer lender. We specialize in providing loans for customers with less-than-perfect credit. We can help you with a genuine loan. Our loan services include... 1. PERSONAL LOANS 2. BUSINESS LOANS 3. MORTGAGE / HOME LOANS Amount ranges from $3000 to $20 million. Repayment period is between 6 months to 25 years. We offer secured and Unsecured loans. Even without a collateral, we can still provide you a good loan. We give loans worldwide - to any country. Talk to us now! To apply for a loan contact our e-mail:  instantloans.plc@gmail.com
184 comments
Read more

Looking for a Small Business Loan?

Over the past 5 years there has been a huge increase in the options available to small business owners looking for financing. It’s a lot easier these days to get financing that it was 10 years ago. However, with so many choices, it’s a lot more difficult to figure out which  option is best for your small business. Rosalyn James, the CEO of Instant Loan provided some comments and advice on business financing to writer Henry Kivitt at Small Business Central. Apply for a business loan with Instant Loan below. Do you need a business loan? Apply for a business loan online with us. We can help you with a genuine loan to start a business or even to expand your existing business. We also lend personal loans, auto loans, truck loan, equipment loans, debt consolidation loans, home loans, mortgage loans, agricultural loans, small business loan and commercial business loans. Amount ranges from $3000 to $20 million. Repayment period is between 6 months to 25 years. We offer secured and Unsec...
3 comments
Read more

WILL A TEMPORARY LOW INTEREST RATE AFFECT YOUR MORTGAGE CHANCES?

The September meeting of the U.S. Federal Reserve board did not increase the federal funds interest rate which affects the rates given to other financial instruments such as car loans and home mortgages. Although a rate hike was expected in September, the Feds nixed that plan, citing that the American economy wasn't strong enough as the prime reason. The Feds' decision, however, created what could be considered a temporary low-interest rate for the American housing market. How this will affect home buyers is unclear as how much the Fed will raise base interest rates is still unknown. All indications point to an interest rate hike that will happen soon, most likely by the end of 2015. If the rate hike is around 0.25%, homeowners will hardly notice the difference. The difference will come when, and if, the Fed continues to hike interest rates as the economy improves. Most experts agree that a 25 or 50 point rise in interest rates won't produce a visible effect on the e...
1 comment
Read more