Profile picture for pandacrystal

new mortgage on an investment property

I am looking to purchase an investment property with less than 50K. I dont plan to live in this property. I am looking to positive cash flow.  I currently have a house with FHA loan and I have excellent credit score. I want to use up to $5K as down payment for this investment.  That is at least 10% down for the price range I am looking for. If it's less than 50K, that is even more than 10% down. My questions are

- As I already have a FHA loan, will I need a conventional loan for this investment property? How much % down is required? Will there be penalty for early payment? I may ask for 30 or 15 years but I always pay more every month to pay off quicker. With my current FHA, there is no penalty. Not sure how it works with a new loan.

- Are there any specific requirements for me to qualify for a loan for investment property?  is there a minimum on the loan amount I have to get?  For example, if the property I am getting is, let's say 30K. With 5K I am putting down, I only need a loan for 25K. Can I get a loan for this amount?

- As this is a smaller loan, will the interest be higher? 

Thanks

Crystal
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July 09 2012 - Phoenix
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Answers (1)

You'll need at least 20% down unless you find a HomePath property for sale, then then minimum down is 10%.  

You cannot buy an investment property using FHA financing. You will need a Conventional loan or private money.

You will be hard pressed to find a lender who will do a loan for you under $40,000.

All the best,
Ros
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July 09 2012
 
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