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Are investment property mortgages different?
Mortgages for investment properties are basically the same as for your own home.
Many lenders provide the same interest rates while others either charge slightly more or simple don’t provide investment property mortgages.
You must have minimum 20% down payment.
Qualifying is a little tougher as only 50% of the rent is added to your income when calculating ratios. There are two lenders that are more flexible in how they look at rental income which is sometimes needed to get approval.
On a purchase where you need rental income to make numbers work, you’ll need leases in place.
Everything starts the same way – with an application and ratio calculations.
All of the above applies for single family through 4 plexes. Above that you are now moving into commercial mortgages – which are a whole different animal again. In this case, it is best just to call.
Note: putting investment properties into a corporation severely limits the number of lenders who will lend. It must be a holding corporation only. It can’t be involved in any other business activities but holding real estate for investment.
Note: putting the property in one spousal name and having the second just guarantee the mortgage is only offered by one lender that I am aware of. Call first.