Loan for rental property - Posted by Stephanie

import · April 15, 2007, 5:52pm

Posted by Max-Va on April 15, 2007 at 22:33:49:

You really don;t give enough info. LTV, income documentation are key factors.
Yes, DTI ratio is very important. Gross rental income minus 25% is considered income for DTI purposes.

import · April 15, 2007, 5:52pm

Posted by Stephanie on April 15, 2007 at 17:52:35:

Hi Experts,

We are looking for a condo to buy as a rental property. My father will be living there as our “tenant”.

What kind of loan interest rates should we expect? My husband and I have excellent credit (high 700s credit score) but we don’t have a lot of extra money per month. We have primary residence with about $100k in equity. I would expect our debt to income ratio wouldn’t matter much if we are buying a rental property?

I don’t want to get “scammed” with this loan, so want some advise from the experts here!

Thanks,
Stephanie

import · April 16, 2007, 1:23pm

Re: Loan for rental property - Posted by Stephanie

Posted by Stephanie on April 16, 2007 at 13:23:47:

Thanks, Ben and Max for your help. We don’t have a property in mind yet (still looking), but it will most likely be a condo in the $150 to $200k range, which we’re hoping to get at auction for under market price. We’re looking for little to no money down loan and was hoping we could get “pre-approved” for a particular amount to help us in determining our price range. Since we’ve never had an investor loan before, not sure how it all works.

Also, since we may want to buy at auction, we’d want to secure financing up front so we could close quickly - most of the auctions in our area require full payment within 30 days after the auction.

Thanks.

import · April 16, 2007, 11:00am

Re: Loan for rental property - Posted by Ben Carmona

Posted by Ben Carmona on April 16, 2007 at 11:00:14:

Not enough info. I highly recommend that you contact a nationwide mortgage consultant that specializes in investment loans. There are so many important questions that need to be addressed. Sure, someone could just throw out rates, but they’d have no weight behind them.

Investent loans have some tricky guidelines to them.

The best rates will be available to you with 20% down. There are programs that offer 90-100% financing. Any debt to income issue can be resolved by using a “no ratio” loan.

This is a quite simple process if you’re working with the right person who will also take the time to educated you about the loan process and types of programs available.

Ben Carmona