3 Strategies For Real Estate Investors
Thursday, October 30th, 2008 • Related • Filed Under
Today’s mortgage lending is changing almost overnight. As a real estate investor you have to understand what the strategies you will need to invest in real estate. Because non owner occupied loans carry a higher risk, lenders are now doing everything in their power to limit that risk.
Aaron VanTrogen from Geneva Financial has been kind enough to give us some suggestions.
3 Must Do Strategies For Real Estate Investors
- There are no more state income loans. All loans are now “full documentation.” If you are a W2 earner you need two years of W2s and one months worth of pay stubs to qualify. Self employed borrowers or borrowers that currently have investment properties will need two years worth of tax returns. A two year average of adjusted gross income will be used to qualify. If the borrower does not meet debt to income guidelines, you may need to have another borrower on your application that can help offset debt obligations with additional income.
- You are going to need liquid assets. In most cases lenders will want to see six months PITI in reserves at closing. You will also need assets for the down payment. Their still is 90% financing available on now owner occupied, however most investors are going to want to put 25% down because of the new pricing adjustments. Your liquid assets need to be in a personal account and they need to be in your account for 60 days.
- Your credit scores have always been important but probably even more important right now. If your mid-score is below 720 you can expect to have substantial price hits for cash out, and loan to values over 75%. You should be alright if your score is 720 or above.
We all know this market has endless opportunities to purchase under valued properties. Unless you can purchase the property with cash, you are going to have some financing obstacles in front of you.
If you are looking for a mortgage make sure you get sound financial advice well in advance.
