19 Aug Power move for rental property financing
Are you looking to purchase rental properties? Historically, the minimum down payment was 20% and most often, it came from the buyer’s own resources, and could not be gifted. If it’s an owner occupied purchase, the down payment can be gifted from a directly related family member. Good news is, that in July, one of my main lenders has announced that they will allow a gifted down payment (only from a related family member) to be applied to rental property purchases.
1. Their applicants credit score must be 740 and/or higher being eligible for 80% financing on investment properties with no mortgage insurance premium, no fees, and no higher than market rates.
If your credit score is below 740, the down payment is increased to 25% in order to avoid the mortgage insurance premium. Keep in mind that if the client wants to pay the insurance premium, then 80% financing is doable.
Please note that the 740 credit score is directly connected to the downpayment amount. For clients with a score under 740 the gifted option is still available.
This program was created for the smaller investor to pool money together with other family members and get into the Real Estate market. It creates the opportunity for many who have otherwise been pushed out of buying additional properties.
Feel free to contact me if you have any questions in regard to this article, or you are interested seeing if you qualify.