Thinking of buying your first investment property? Looking back historically, most wealth in this country has been obtained though real estate, so there is plenty of good reason for you to buy real estate too.
There are many considerations when getting into real estate, including are you cut out to be a landlord, having the down payment, property location, calculating margins, maintenance and unexpected costs, understanding landlord-tenant laws as they relate to fair housing, security deposits, eviction rules, and more.
Sounds scary, but the reality is, with a little bit of knowledge, owning rental property can be pretty easy, and the payoff is usually well worth it. Hint hint, especially tax write-offs!
I have been a Mortgage Loan Officer for nearly 30-years, and I have also owned rental property for over 20-years, so I have some pretty good insight on both of these aspects of financing and owning rental property. I personally am licensed in MN, WI, IA, ND, and SD. Our company is also licensed in FL, CO, TX - so we can help you in any of those states.
Here are a few mortgage related tips you need to know when buying your first investment property:
1) DOWN PAYMENT - Minimum 15% down on single family properties, condo's, and townhomes. You get a better interest rate, and of course no PMI (mortgage insurance) with 20% down. The minimum down payment for a multi-family property is 25%.
2) INCOME QUALIFYING - If you can qualify for both the current home and the investment home payment, this is easy. Standard debt-to-income ratio's apply.
If you need some of the rent to help income qualify, you can do that, up to 75% of the lease amount, but not to exceed your actual payment. So you can possibly wash the payment, but not 'show a profit'. Rules change after you've had rental management experience.
3) INVESTMENT INTEREST RATE - Mortgage interest rates on investment properties are easily 0.50% to 0.75% higher than an owner occupied home, so be sure to factor that into payment calculations.
Experience the Cambria Mortgage difference by calling (651) 552-3681, or visiting iMortgageJoe.com.
YES, the counter top people! Equal Housing Lender. NMLS 274132, 322798. Cambria Mortgage lends in the following states: MN, WI, SD, ND, IA, FL, TX, CO, This is not an offer to lend or to extend credit, nor is this a guaranty of loan approval or commitment to lend. The information here may not be up-to-date and may no longer be accurate. Products and interest rates are subject to change at any time due to changing market conditions. Actual rates available to you may vary based upon a number of factors. Consumers must independently verify the accuracy and currency of available mortgage programs. All loan approvals are subject to the borrower(s) satisfying all underwriting guidelines and loan approval conditions and providing an acceptable property, appraisal and title report. (C) 2020 Joe Metzler