Mon – Fri 9-6 EST
Sat-Sun Closed
9465 Counselors Way Suite #200, Indianapolis, IN 46240
Wednesday, 07 October 2015 05:00

How to Secure The Best Business Loans for Rental Property

Secure a great mortgage

secure a loanSecuring a great mortgage deal for an investment property is a daunting task. Before you step down the business loans for rental property path, it is important to reserve some cash to impress your prospective lender. Remember, good credit score means a happy lender, so make your credit history strong that a lender cannot refuse your mortgage application.

It is strongly recommended doing extensive research on mortgage financing before purchasing rental property. Try to develop a healthy relationship with a reliable lender to obtain rental property loans without any hiccups. Remember, lenders consider a mortgage for investment properties to be riskier than for residential property. So, if you are considering buying a rental property, make sure you keep in mind a few important factors that include:

Lending Limits

According to Fannie Mae, an investor is allowed to take only up to 10 loans once. So, working with the right lender should be your priority as he will help you make the best out of your 10-loan limit. It's worth noting that bigger banks or financing institutions will allow only up to four business loans for rental property. Do extensive research to reach a lender that can support 10-loan limit.

Investor-Friendly Lender

Buying a rental home is a long-term investment and your lender is a BIG part of the entire scenario. Make sure you team up with a strong and reliable lender who understands the real estate landscape. Work with a direct lender if you are planning to build a strong portfolio of rental properties. The one primary difference between a broker and a lender is that a broker will shop around to get you the best deal, whereas a lender is the institution from where you will get the loan. Don't hesitate to ask your prospective lender about his current active investors and how many business loans for rental property can he offer and more.

Credit Requirements

Since, there is a 10-loan limit, there is different credit qualification guidelines. For properties 1-4, your credit score should be around 630 and for properties 5-10 at least 720 credit score is required.

Cash Reserves

Besides down payment, make sure you have enough cash reserves that can match at least six months of mortgage payments of your business loans for rental property. Once you know the cost estimate of the rental, get a monthly payment estimate from your lender so that you can manage your expenditures and savings accordingly.

Down Payment

Just like there are two sets of credit score guidelines, for down payments you need to follow different guidelines. If you acquire business loans for rental property 1-4 for single family you are liable to pay 20% as down payment, for loans 5-10, it would be 25% and for loans 1-10 for multi family, you need to pay 25% to 30% of the total cost of the property.

W2 Income

In order to be eligible for a mortgage deal you need to provide your lenders with a minimum of two years of w-2 income. It is required to calculate your annual income. If you are self-employed, you need to show your tax returns of the past two years and a letter from CPA confirming your previous tax returns. Business loans for rental property are quite complex when it comes to taxation but certain deductions can be planned better.

Rental property is an ideal way to build your wealth. Make sure you plan the strategies ahead of time for smooth and hassle free proceedings. Call us today for a free consultation.

 

Read 3674 times

Rental Home Financing
9465 Counselors Way
Suite #200,
Indianapolis, IN 46240

 

Fast Online Loan Application
Apply Now!

CALL TODAY: 888-375-7977

About Rental Home Financing:

Rental Home Financing, as the best mortgage lenders we originate rental home loan products and cash out refinance investment property loans as the best investment property refinance lenders. Commercial blanket loans are available with a commercial purpose to suit your needs.

Also, as DSCR loan specialists, we are currently authorized to make such loans in most all areas of the United States. Specific circumstances will determine whether we have the ability approve/close portfolio rental home loans in your state(s). When you are ready to get a mortgage for rental property, we are ready to serve you.

© Copyright 2022 Rental Home Financing. All Rights Reserved.