Investment Purchases

A little while back Fannie Mae and Freddie Mac passed a rule that they would not buy loans for borrowers who owned more than 4 properties. That is still the case, but you may be able to find a bank that provides their financing under their portfolio program, which means they keep those loans. Since they are not sold to Fannie or Freddie, they can apply their own guidelines to them. The reason I bring this up, is because we have a bank that offers financing for investment properties. They will let you own up to 8 homes, and that includes your primary residence. It will be a full doc process, and some of things a borrower will need to provide are; 2 years worth of taxes, and plenty of assets. The taxes will show the Schedule of Real Estate and you will be able to see what they write off and what you may be able to add back in to calculate the accurate rental income. Our banks are asking for assets for EACH property owned. When they ask for assets, they would like to see the monthly payment as each reserve, the monthly payment to be used should include taxes and insurance. They would like 2 months for their primary residence, and 6 months for each investment home. As an ex., if your monthly payment on your primary is $1000, they would like to see total reserves of $2000. If each of your investment homes has a monthly mortgage payment of $800, you will need $4800 for each investment property. Our bank will take retirement accounts as an asset, but they will only count 70% of that. The reason is, if you withdraw money from your retirement account, you might incur penalties, and fees and taxes. You will need to provide assets with a 60 day history. Monthly bank statements or retirement quarterly account will work. If there is a big deposit on the statements, please be prepared to document that with a paper trail. Lastly, banks will not take leases instead of taxes, unless you just bought the property in the current year and have not had a chance to file them in your taxes. If that is the case, please be prepared to show copies of cancelled checks or deposit slips. The banks will not take leases as the only document to proof rental income.  

• Rate this Post!

  Select Your Rating:

  • 5 Stars (Excellent!)
  • 4 Stars
  • 3 Stars
  • 2 Stars
  • 1 Stars (Poor)

• Share this Post

  Share With A Friend:

  Your Name Your Email

  Friend's Name Friend's Email

  Optional Message

  Send

• Print
• Social Bookmarking

  Add to Bookmarks: