Chances on getting mortgage on rental property?

watchawantittobe
Contributions:7

I'm interested in buying a short sale in my neighborhood to rent. I have an FHA on my primary residence, purchased in 2009. I have enough for a 10% down payment. I have about 200K in debt (mortgage + student loans, no credit card debt). Listing says that the bank approved the short sale price of 64K. They are practically giving it away. I have a credit score of 781 and annual income of 98K. What are my chances of getting a mortgage for the investment property?

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January 10 2011 - Baltimore

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Answers (4)

Gordon Haraway, "1stTimebuySpecialist"
- 0.0/5.0
Contributions:250

On an investment property the required minimum down payment is 20% as others have already indicated. There is one program you may want to look into and that is the Fannie Mae Home Path loan. As an investor you can get in for a low down payment, no mortgage insurance and no appraisal. The home must be owned by Fannie Mae. Go online to the Fannie Mae home path website and look at the available properties. If you find something that is of interest I would be glad to do your loan.

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January 19 2011

Kelly Lacey, "kellylacey"
- 4.9/5.0
- (39 reviews)
Contributions:797

Conventional financing requires a minimum of 20% down on investment properties. With the purchase price of $64K that would be $12,800. If your income is $98K a year, or $8,166.67 per month gross you should be able to set aside the extra 10% pretty quickly unless your mortgage and student loan payments are extremely high. Remember that you'll need additional assets for closing costs, pre-paids and reserves.

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January 11 2011

Jacqueline Nguyen, "Seattle Expert"
- 4.9/5.0
- (23 reviews)
Contributions:26

I agree in that you will need more than 10% down for your rental/investment property. You should try seeking a Portfolio Loan for investment properties from your local bank.

I hope that this helps, Jacqueline

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January 11 2011

Daniel Bretzke, "Bretzke"
- 4.5/5.0
- (3 reviews)
Contributions:303

A lot of community banks are making loans on investment properties, but they are asking closer to 30% down payment, and the property should cash flow after a vacancy rate, management fees, and repair reserves.