Wednesday, 13 November 2013

Mortgages for Rental Properties

Several years ago, it was fairly easy to obtain a mortgage to purchase a rental property.

If the rent carried the mortgage, taxes and condo fee's if applicable your would probably get approved for up to 80% financing.

That's changed is recent years. Now lenders are looking for Debt Servicing.  example.
A client needs to be able to carry their own home and the rental property against there own income and 50% of the rental property income.  The Total debt cant exceed 42% of the total income.
This is difficult for many investors and pretty much impossible if you own 2 rental properties.

One solution is to use a non bank lender that has different risk models and uses different underwriting calculations. I have access to these lenders.  You might pay a slightly higher rate but don't forget its all tax deductible if the property is for investment.

Getting preapproved for rental purchases is often overlooked and yet this type of mortgage financing has been tightened up almost as much as self employed deals.
Get preapproved and try to avoid properties with heavy taxes and condo fee's

If you own a Rental property or plan to purchase one or two give me a call to see what you can borrow.

No comments:

Post a Comment