With the real estate market taking a dip, many investment property owners are looking to take advantage of the future boom. Having many potential and current property owners inquire into 100% financing, here are a couple of guidelines that may be helpful:

-If you currently own a home, and are looking to buy an investment property, first make sure it can be qualified as a second home. As a second home, it generally has to be located around a resort type of area, river, lake, or generally rule of thumb, located in another state. If the property is within 5-10 miles of the owner occupied home, lenders will not classify it as a second home. The importance of getting a home to classify as a second home, is merely a lower interest rate will apply, generally 1.5% lower.

-For 100% financing on a N/O/O(Non-owner occupied), lender are typically looking for FICO score of 660-680, with full documentation of the income: 2 Years of tax returns or W2's. 12 months Bk statements will not be accepted. FICO scores of 700+ are necessary for a stated income loan, where as long as you are employed, you can state your income high enough to qualify within reason.
-The most important item regardless of full/stated income, is verifiable assets. Any lender will want to see assets such as savings/checking account, 401 K, stocks or bonds, etc.
-Rental Income- Always make sure to have a rental agreement ready because 75% of the rental income is taken into factor to help lower your DTI. Even if the renters haven't moved in, make sure you do get a rental agreement because it may help if your income is a bit low to qualify you.
-20% Downpayment- Where most investment property owners will take advantage of 100% financing, a smart move to avoid capital gains is to roll over the money and re-invest into the property. By putting down 20%, it helps keep the payment down by eliminating the high interest second mortgage that is involved in 100% financing.
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Kevin
klu@nationwidemortgage.net
Nationwide Mortgage
Toll free (866)427-7200