Investing in rental properties? Here’s what you need to know about financing.

While conventional mortgages are readily available for primary residences, financing rental properties comes with additional considerations. Here’s a breakdown:

Down payment: Conventional loans for rentals typically require a 20% down payment (higher than primary residences).

Stricter requirements: Lenders have stricter qualifications for rental property loans, including higher credit score requirements and net worth assessments.

The “offset of rental income” advantage: As mortgage brokers, we can connect you with lenders who consider your rental income when determining your borrowing power, allowing for a potentially higher loan amount.

Interest rates and costs: Be prepared for slightly higher interest rates and additional costs like rental income appraisals and assignment of rental income forms.

Property size: Most lenders offer residential mortgages for properties up to fourplexes. Larger properties might require a commercial loan.

Getting the best deal:

Consulting with an accountant is wise before investing in rentals. We, as mortgage brokers, have access to a wider range of lenders with competitive rates and flexible policies, increasing your chances of qualifying for the best possible loan for your rental property.