When you’re looking to finance an investment property, there are many different options of investment property loans that you can explore. Coming up with the money for a down payment can be challenging, so how much exactly do you have to pay upfront?
At First Fidelis, we offer our clients the best loan options because we understand that buying a home is a big decision. Before getting started, here is some crucial information you need to know about getting a loan for your investment property.
What is an Investment Loan?
An investment loan is used to finance any investment purchase, such as a home or property. Many people interested in investing in real estate use these loans to rent out their properties or fix up the property and then turn around and sell it.
Investment loans cannot be used to purchase a primary residence, however, and must only go toward whatever you are investing in.
What are the Requirements for Getting a Loan?
There are various types of investment loans with different parameters, like down payment options, interest rates, and the length of the loan term. Additionally, here are some general requirements for getting a loan.
- Credit score: You can achieve an excellent credit score by paying off bills, debts, and credit cards. Your credit score is usually higher if you pay above minimum payment amounts and use less of your available credit. Typically, you will need a credit score of at least 640 to secure an investment property loan.
- Funding a down payment: While down payment requirements vary depending on the loan type and the lender, the more money you decide to put down upfront, the better. This decreases the amount you will pay interest on down the road.
- Debt-to-income ratio: Lenders want to see that you have the income coming in each month to make your loan payment on time, so they may ask for pay stubs or income summaries.
What We Offer
Typically, lenders will want you to put 20 percent down; if you need to put down less than that, the lender may require that a third party guarantee the loan. At First Fidelis, we have many different options for investors looking to qualify for a loan, even with a 15 percent down payment.
- Fannie Mae-backed loans: These loans are backed by the Federal National Mortgage Association, and they typically only require a minimum down payment of 5 percent.
- FHA loans: These loans are guaranteed by the Federal Housing Administration, and they only require down payments between 3.5 percent and 10 percent, depending on your credit score.
- VA loans: If you’re an active duty or a veteran, VA loans are available to you. These loans are backed by the Veterans Administration and often don’t even require a down payment.
First Fidelis, LLC is here to help you get the best investment loan that suits your needs. With mortgage lenders in Kansas, Missouri, Virginia, Florida, Arkansas, and Mississippi, we’ve helped homebuyers and investors all across the country. Contact us today at 913-205-9978.