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do loan amounts vary depending on if you buy the house for yourself or if you will be renting it out?

Mon Jul 14 2008, 13:14 - Indianapolis - Home Buying - 5 answers
 
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M
Home Buyer
in Indianapolis
M, Home Buyer in Indianapolis in Indianapolis
Answers (5)
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Amanda Mcdon… was FIRST TO ANSWER
Good Question M!

Everyone has this about covered. I just want to add one thing.

DO NOT COMMIT MORTGAGE FRAUD......DO NOT COMMIT MORTGAGE FRAUD

With all respect to Jody Jones, if you think it is wrong, it is wrong.

Things like this has the market the way it is.

If you need rate quote or additional information please let me know or check out my website

Best regards,
Tony

Tue Jul 15 2008, 07:15
Web Reference: http://www.getmyratequote.com
 
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Interest Rates vary as to your credit score and purpose of the loan. As an Investor you will probably pay at least 1% higher if your credit is above 680 and you may pay higher rates according to your specific situation.
I would not apply for a owner occupied loan and have plans to change my mind; and turn it into a rental as may have been suggested in a previous answer. There is a signifcant emphasis; to make an effort to
insure that compliance to loan specifications are being followed. These (slick willy) tactics are an example as to the Mortgage problems facing the Country.

Mon Jul 14 2008, 14:45
Web Reference: http://www.myclubrealty.com
 
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Lending answer:

The down payment requirement will vary significantly. FHA insured loans require just 3% down but are available on owner-occupied dweliings only. The minimum down payment for a home to rent out (ie investment property) is 10%... and many banks require as much as 25% down due to the higher risk of default.

You must decide if you will occupy the dwelling or rent it out at time of application. It would be wise to consult a Realtor first to become expert in the local rent market. Renting out a home is exactly like running your won business, and a good Realtor can help you with rent pricing, property valuation, market demand, etc.

Mon Jul 14 2008, 13:30
 
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Yes, to get the best rates, the home must be owner occupied. You will pay a higher rate for investment/rental properties. That said, I know of no rules that say if you have an owner occupied home and you move out, that you couldnt eventually use it as a rental. Perhaps one of the folks on the list in the mortgage industry can give you more specific information on that.

Jody Jones
Century 21 Landmark Realty
Elkhart, IN

Mon Jul 14 2008, 13:28
Web Reference: http://calllandmark.com/jjones
 
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FIRST ANSWER
Yes, rates wil vary slightly if you do not use the home as your residence. Also the taxes will be more expensive as well.
The rates are not going to be a lot higher, but they will be slightly higher. I wouldn't let the rate prevent you from buying an inverstment property right now! The rates are great and the market is set right for people to get into rental property!!

Good Luck!

Amanda McDonald
F.C.Tucker Emge REALTORS
Evansville, IN

Mon Jul 14 2008, 13:25
 
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