Qualifying for Mortgage Loans for Investment Homes
Mortgage loans for investment homes in California, Florida and Illinois have certain mortgage underwriting guidelines. The investment home purchaser has two types programs of mortgage loans for investment homes. The first type of investment home mortgage loan is a 20% down payment conventional investment mortgage loan. With a 20% down payment investment home mortgage loan, the mortgage loan borrower cannot use the future rental income when qualifying for the investment home mortgage loan. They would have enough monthly gross income in order to qualify for the investment home mortgage loan without using the potential rental income. If the housing expenses on the new loan causes the mortgage loan borrower’s debt to income ratio to exceed the mortgage lender’s debt to income ratio guidelines, the mortgage loan borrower needs to consider putting down 25%. Mortgage loans for investment homes in California, Illinois and Florida have higher mortgage rates than second home mortgage loans.
Using Future Rental Income to Qualify
If the investment home purchaser puts 25% down payment on his or her purchase, they can use 75% of the rental income. If the investment home is vacant, they can use the 75% of the potential rent determined by the appraiser. Putting 25% down on an investment home will also reward the investment home mortgage loan borrower with much better mortgage rates. There is a large mortgage rate difference between putting 20% down and 25% down on an investment home.
What are Hard Money Loans?
Hard Money Loans is a great source for seasoned real estate investors, real estate developers, and property flippers to utilize for short term financing. Hard Money Lenders normally require 35% down payment and interest rates can be 10% to 15%, however, you do not need the best of credit to qualify for a hard money loan . Hard Money lenders are more concerned with the equity in the property than the actual borrower and borrwer’s credit or income. Sometimes investment home buyers with perfect credit us hard money lenders to get financing because many times the property is not financeable due to needing major repairs. What happens is that the investment property investor pays the higher interest rates to do the acquisition of the property, will rehab it, and then sell it and pay off the hard money lender or will finance it with an end lender at much lower interest and keep the property as an income producing rental property and pay off the hard money mortgage lender. Hard Money Capital Group, a reputable Hard Money Lender based in Downers Grove, Illinois, is the hard money lender of choice for most real estate investors, real estate developers, and consumers. Hard Money Capital Group, which is headed by President Vince Liguori and Executive Vice President Jay Boetscher, also known as The Rehabman due to his expertise in FHA 203k Loans, is a full service residential and commercial lender where they help their hard money loan borrowers find an exit strategy. Hard Money Capital Group parent company, Gustan Cho Associates, is an end lender specializing in residential and commercial mortgage loans.
You can visit Hard Money Capital Group website at www.hardmoneycapitalgroup.com.
I specialize in mortgage loans for investment homes in California, Illinois and Florida. If you have any question on mortgage loans for investment homes, please contact me at 262-716-8151 or email me at firstname.lastname@example.org. You can subscribe to our newsletter at www.gustancho.com .
Gustan Cho, NMLS ID 873293