Qualify for a Loan to Purchase Rental Properties – Guide

The rental market is HOT! and rental properties are making landlords a great return on investments. Mortgage rates are high and millions of first time home buyers are pausing on the purchase plans which results in a higher demand for rental properties and the higher the demand – the higher the rental prices.

As you hear on the media, rental prices are skyrocketing specially in metro areas where jobs are. The continuous rise on the mortgage interest rates have created the ultimate opportunity for real estate investors and most of them will need a mortgage loan to complete their purchase and growth their real estate portfolio.

Novice real estate investors and seasoned or experienced real estate investors purchasing or refinancing their rental properties will qualify for these loans.

No Income, No Employment needed to qualify for a loan to purchase a rental property.

Buying rental income properties is easier than buying a primary home because the property qualifies with the rental income and not the borrower. You are not required to show your income or even if you have a job. These loan are based on the rental income the property brings every month.

Here is how to get qualify for a loan to purchase rental properties:

Your Credit Score. Make sure your credit score is in good shape.

Your credit score is one of the 2 most important things you will need to qualify for a loan to purchase rental properties. The higher your middle credit score is, the better optzions you will have when looking for financing. Your debt reported on your credit is not important! You can have thousands of dollars in monthly payments reported on your credit report but it does not matter as these loans to purchase rental properties will not look at your reported debts or your monthly payments. Your credit score is what you need and nothing else. Improve your credit scores. Get a copy of your credit report or log in to one of the free credit report providers and review your credit.

The Property to Purchase: The rent must equal the mortgage payment or be higher.

Yes, the rent of the property you are purchasing must equal or be higher than the proposed mortgage payment including the principal and interest, taxes, insurance and any home owners association payments or flood insurance payments. Most lenders require a 1/1 ratio, which means if the mortgage payment of the rental property you are considering purchasing is $4,000 per month then the rent amount the property is bringing monthly or the rent market is should be $4,000 or more. If the property is already rented, then you will need to ask the seller for a copy of the rental statement income for at least the last two months and the amount should clearly equals to your proposed mortgage payment. If vacant or will be vacant after you close because the current tenant is on a month to month or moving out soon, then at the time the appraisal is ordered, the appraiser will have to add a rental schedule, which is a report based on rentals around the property stating what they consider the rent amount to be. When property rents for at least the amount of your monthly mortgage payment, then the property qualifies for a loan.

The Down Payment: Required to purchase a rental property.

This is not an FHA loan or Conventional loan and there is no 3% down payment programs. These loans are for real estate investors and they require at least fifteen percent down payment. The down payment does not have to be sourced or be on your bank account for thirty days or anything like that. As long the money for down payment is in your bank account before closing or obtaining a clear to close, you should be fine.

Ready to start your rental property business? You can be a novice real estate investor or an experienced real estate investor, we are here to help you qualify for a loan to purchase a rental property.

Contact Optzions Real Estate Mortgage to learn more about these rental property loans or complete a free pre-qualification – no hard credit inquires but if you are ready and want a loan to purchase a rental property then complete a free application online at www.optzionsmortgage.com.