Mortgage for Investment Property
At Mortgage Diligent, we work with Real Estate investors and our expertise lies in to get you the right Mortgage solution, based your over all financial portfolio and future goals. Whether you’re just getting start or you are already an investor, you need to keep below points in mind and we help in all the aspects of investment property when it comes to Mortgage.
Investment is a Business
As an investor, when you buy home, it’s for a business. In business you need to consider investment based on potential revenue generations (Cash flow from the property), Cost of Capital (Mortgage), Operational cost (Maintenance cost), appreciation (Increase in home price), Equity (by Mortgage payment), Sweat Equity (Home Improvements), Depreciation (Equipment aging), and Taxes and Insurance. Sounds like running a mini company? Yes Indeed, however, you have our back to support to know all the unknows so that you are in complete control with peace of mind to enjoy the ROI.
Facts over Emotion
To become a Real Estate Investor, a.k.a Business Owner, you need control your emotions and focus on facts and numbers more than on aesthetic values of the property. For example, if the furnace of subjected property not in good condition, don’t discard the deal, but rather negotiate the deal in your favour knowing how much it cost to replace with new furnace.
Location
Location plays critical role while choosing investment properties. If you are looking for corporate professional tenant to rent out, you might want property with easy to commute, school and good community. If you are looking for student rental opportunities, you may want to buy near major universities. If you are buying pre-construction property, you must analyse what are future projects in next 3-5 years in the area (new Subway stations, LRT construction, F500 company opening its new branch, or new University campus etc.).
Mortgage Planning
Planning your Mortgage is one of most important factors in buying investment property. When we say panning, it is at your portfolio level and not just for one transaction. At Mortgage Diligent, we work with Real Estate investors and our expertise lies in to get you the right Mortgage solution, based your over all financial portfolio and future goals.
Upfront Cash
If the property you’re buying isn’t a primary residence, then in most of cases, you are required to put 20% down payment plus closing cost.
Rental Income boost your Mortgage Qualification
Rental Income is the sole cash from the subjected property till you plan to sell it or refinance (in future). When lenders decide how much mortgage you qualify, they’ll consider your income, debts, and credit score. And good news is that, if you’re buying an investment property, lenders add up to 80% of the subjected property rent to your overall income, so you’ll qualify for a bigger mortgage. Lenders may require an actual lease in place or an appraiser to confirm the amount of rental income that will be generated. As an investor with 20% or more down payment, you qualify for 30 years amortization. It means low mortgage payment (smaller cash outflow compared to 25 years mortgage payment). Also you can write off the interest (cost to business) on your mortgage against your rental income come tax time.
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