Business
Want to sell your home? Get a FREE home value report. Want to buy a home? Search all homes for sale.Today, Todd Gydesen of Guild Mortgage joins us to share a few tips for those who are looking to purchase their first investment property. The minimum down payment required by Fannie Mae on an investment property is 15%. The problem with that is the difficulty of obtaining the mortgage insurance needed to make that happen. The standard down payment, then, is 20% down. If you put 25% down, that extra 5% down will improve your interest rate by almost half a point due to the Fannie Mae adjustments for risk level. In the long run, that lower interest rate will make a huge difference with what you’re trying to do! Once you have the down payment ready, you need to prepare your reserves. Essentially, your reserve is the amount of money you have left in your possession after the transaction is closed. Fannie Mae simply wants you to have a certain number of monthly payments for all the properties you have financed. In most cases, you can use rental income to qualify for this sale. When you’re buying an investment property that already has a tenant in it, that’s the easiest way to go. You can use 75% of what the monthly rent is to count against the new monthly payment. If the home is empty, all you need to get is a lease agreement and a deposit check that’s cleared your account. This is a great way to buy an investment property without having to qualify for all of the payments!If you would like to reach Todd directly to discuss your options, give him a call at (503) 312-4686 or visit him at www.GuildMortgage.com! If you would like assistance finding a great investment property, or if you have real estate questions of any kind, please don’t hesitate to reach out to us at any time! We would love to hear from you!