![]() In a low interest rate environment, the interest rate on a mortgage for a rental property is still relatively low. ![]() She recommends asking a lender to work up an estimate for both 20% down and 25% down, so you can see the difference in interest rates and payments. “Borrowers usually get the best deal on an interest rate if they put down at least 25%,” Dalzell says. PMI does not cover investment property, so investors must make a larger down payment. However, for a down payment lower than 20% on your own home, a borrower is required to pay for private mortgage insurance (PMI), which can cost between 0.25% and 2% of the loan balance per year. You can make a down payment on your own home of as little as 3% in some cases. In most cases, the minimum down payment required for investment property is 15% to 20%. ![]() You May Have to Make a Larger Down Payment Here are three ways a rental property mortgage differs from a mortgage for your primary residence. “A mortgage for an investment property carries a higher level of risk than a mortgage for a primary home, simply because the mortgage holder isn’t living in the home.” “Mortgage lending is all about risk levels,” says Brooke Dalzell, director of production at Minute Mortgage in Scottsdale, Arizona. What Makes a Rental Property Mortgage Different Only pay a fee if your offer goes to contract. Review property details like floor plans, valuations, and current leases. Use custom filters to find the property that is right for you. Mobile Row(Auto populated based on data added, no input required)
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