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Rental Property Mortgages | Investors flooding market? | Going long on rates | Real Estate & Currency
Manage episode 308212900 series 2112449
Rental Property Mortgages - how to qualify for them.
Qualifying for a mortgage when purchasing or refinancing a rental property can get really confusing.
Here are the key qualification criteria when qualifying for a Rental Property Mortgage:
- the minimum down payment to qualify for a rental property mortgage ranges from 20% to 35% (refinances are limited to 65% of the appraised value)
- rental income generated from the property does not necessarily translate into direct qualifying income. 50% to 95% of the rental income is eligible as qualification income (varies radically from lender to lender)
- the rental income eligibility is classified as either one of the following (depending on the lender and type of income):
- General Qualification Income (least preferred): the mortgage balance is maintained in the application and becomes part of the overall debt load that needs to be serviced for qualification purposes
- Offset Income (most preferred, best bang for your buck): the mortgage balance is removed from the application and a positive or negative offset figure is added to the overall application depending on the lenders offset calculation
- There are (3) types of rental property classifications and their income qualifying parameters are unique and independent of each other:
- Basement Suite rental: when the mortgage holder resides in the property and rents out the basement suite
- Subject Rental Property: the rental property mortgage that the mortgage holder is currently applying for (purchase or refinance), and
- Existing (or Stand Alone) Rental Property: rental properties that the mortgage holder currently owns
- All three of the property classifications can have unique eligibility criteria for qualifying income allowances. For example, a monthly rental income of $2,000 can either boost or weaken an overall application depending on their respective property and rental income eligibility classifications.
- All lenders have limitations when it comes to the amount of properties they deem acceptable for a single applicant. For example, one lender may allow for a limit of 3 properties per applicant (the one they currently reside in plus 2 additional rental properties) whereas another lender may allow for up to 14 accumulated properties under ownership.
Mortgage Brokers are a key resource for individuals who purchase rental properties as they have access to multiple lenders with varying qualification guidelines.
Contact Marko, he's a Mortgage Broker!
604-800-9593 direct Vancouver
403-606-3751 direct Calgary
@markogelo (Twitter)
MarkoMusic (SoundCloud Account)...all podcast music tracks are performed and produced by Marko
Hosted on Acast. See acast.com/privacy for more information.
160 episodes
Manage episode 308212900 series 2112449
Rental Property Mortgages - how to qualify for them.
Qualifying for a mortgage when purchasing or refinancing a rental property can get really confusing.
Here are the key qualification criteria when qualifying for a Rental Property Mortgage:
- the minimum down payment to qualify for a rental property mortgage ranges from 20% to 35% (refinances are limited to 65% of the appraised value)
- rental income generated from the property does not necessarily translate into direct qualifying income. 50% to 95% of the rental income is eligible as qualification income (varies radically from lender to lender)
- the rental income eligibility is classified as either one of the following (depending on the lender and type of income):
- General Qualification Income (least preferred): the mortgage balance is maintained in the application and becomes part of the overall debt load that needs to be serviced for qualification purposes
- Offset Income (most preferred, best bang for your buck): the mortgage balance is removed from the application and a positive or negative offset figure is added to the overall application depending on the lenders offset calculation
- There are (3) types of rental property classifications and their income qualifying parameters are unique and independent of each other:
- Basement Suite rental: when the mortgage holder resides in the property and rents out the basement suite
- Subject Rental Property: the rental property mortgage that the mortgage holder is currently applying for (purchase or refinance), and
- Existing (or Stand Alone) Rental Property: rental properties that the mortgage holder currently owns
- All three of the property classifications can have unique eligibility criteria for qualifying income allowances. For example, a monthly rental income of $2,000 can either boost or weaken an overall application depending on their respective property and rental income eligibility classifications.
- All lenders have limitations when it comes to the amount of properties they deem acceptable for a single applicant. For example, one lender may allow for a limit of 3 properties per applicant (the one they currently reside in plus 2 additional rental properties) whereas another lender may allow for up to 14 accumulated properties under ownership.
Mortgage Brokers are a key resource for individuals who purchase rental properties as they have access to multiple lenders with varying qualification guidelines.
Contact Marko, he's a Mortgage Broker!
604-800-9593 direct Vancouver
403-606-3751 direct Calgary
@markogelo (Twitter)
MarkoMusic (SoundCloud Account)...all podcast music tracks are performed and produced by Marko
Hosted on Acast. See acast.com/privacy for more information.
160 episodes
All episodes
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