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Financing for real estate investors sold to Fannie Mae or Freddie Mac require a down payment ranging from 10% to 25% with a financing fee ranging from 1.5 to 3 points. Please understand that these financing fees are imposed by Fannie and Freddie and are not charges from either your lender or your broker. However, the financing fee allows using conventional rates and financing limits. Conforming loans are available as a fixed rate or an ARM. Even with the financing fees, these loans can be a good choice if your goals are to maximize cash flow and you plan to hold the property for a 3 to 5 year period. Ratios are normally 28/36, but with automated underwriting, excellent credit and some liquid reserves, it is common to see back ratios in the middle 40s. Rental income is decreased by a 25% vacancy factor but there are underwriting methods which eliminates this issue for experienced investors. The Investor Loan Specialty program (actually a growing group of investor loan programs) allows purchase or refinances with only 5% equity. The program allows up to 20 properties plus your home. Available up to $1,000,000 and 2-4 unit properties are acceptable. Ratios are generally 34/40 and a No Documentation loans program is available. Available as a fixed or adjustable rate in many reduced down payment scenarios. Most of the loans we are currently doing are set up as interest only to improve cash flow. Learn more about the power of an interest only loan. 100% investment property financing is now available with fairly reasonable rates. These programs have been available for a while, but at extremely high rates compared to market rates. I have option arms for investment property based on the LIBOR Index. |
In 2008, Short Sales are where most of the action in real estate is. Learn more about Short Sales
I have a page on how to calculate your mortgage ratios.
Read more about Financing for real estate investors Closing Costs
I have a page on mortgage documentation requirements.
Limited and No Documentation loans are now available.
If the building you are looking at contains 5 or more units, you will need commercial loans.
If your interest is in foreclosures, visit my foreclosure page for information and links to property resources.
If you are looking at foreclosures, I have a free report available by email. Request a Good Faith Estimate before you apply.
Here are my thoughts on the difficulty of "flipping" income properties.
For the the greatest flexibility and maximum loan qualifying ratios, you may be interested in the Cash Flow ARM.
Learn about closing in an LLC
As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your debt is structured today can have a life changing effect in the years to come. Read more about this free, no obligation service.
New! View my Wealthbuilder presentation and learn the safe way to manage your debt and fund your retirement.
I hope the information on this page was useful to you. Please scroll down to view my Mortgage Market Guide. It is a weekly publication explaining the financial markets from a consumer's perspective that is available on this website or by email subscription. I have nearly 8,000 subscribers today and would be happy to have you as well. Your email address will never be used for any other purpose.
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for Real Estate Investors
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