If we assume you are going to be buying using a "normal loan" (not private money), then you can not use FHA as they are Primary homes only when purchasing. That means you will be going with a Fannie or Freddie loan, most likely.
Contrary to what most people tell you, there is no difference between the interest rate for a primary and an investment property. The difference is lenders charge "Points" for investment properties, due to the higher risk borrowers will default--1.75% of loan amount if you do a 75% or less Loan-to-Value (LTV) loan; 3.00% of loan amount if you do a 75.01% to 80% LTV loan. Most people do not want to come in with this much money, so they have part of it paid by accepting a higher interest rate (hence, the myth of "higher rates for investment properties" perpetuated by many in the real estate and lending industries).
I may be wrong, since Brenda says she has seen 15% down, but my understanding is there is no Mortgage Insurance available for investment properties at this time, which means the minimum down would be 20%. Also, I believe (after looking at two of my lender's guidelines to refresh my memory) that 3% down with the HomePath program is only allowed on primary residences. The minimum down for an investment property is 15% with a minimum credit score of 660 (20% down with a minimum credit score of 620)--possibly this is where the 15% down comes from, but only for HomePath loans, not "normal" loans.
I hope this helps. Good luck in you property search.
Bill Parker, Loan Officer
AZ Lic# 09011570
CPA--Licensed, no longer practicing
GenCor Mortgage Inc.
15730 N. 83rd Way, Suite 103
Scottsdale, AZ 85260
(O) 480-525-8496; (M) 602-565-3646; (F) TBD
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I would love to help you in your decision making process and in finding your new home. I am a full-time REALTOR and work very hard for my clients. There are many great agents out there. Pick someone you like, can relate to, feel comfortable with and trust.
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WEST USA REALTY
I have never had to put 15% down; I have always put 3% down. Just be sure to be honest with your lender so nothing comes up later down the road.
I have worked with an amazing loan officer at Bank of America if you would like his information.
Realty ONE Group
I am not quite clear on what you are asking; are you asking what would happen if you finance your purchase of a new home as your "Primary Residence" or a second "Vacation Home" & you want to rent it out after you buy? If that is your question, then as long as you refrain from renting out your property for 12 months after you move in, you should be fine if you want to rent it out later.
If on the other hand, your intent is to buy a "Primary Residence" or a second "Vacation Home" & then "change your mind" so you rent the property out, you will be violating the terms of your loan documents that you signed, which could cause you serious legal problems in relation to Loan Fraud.
Just be careful & be sure you have a knowledgeable loan originator who will keep you out of the line of fire. Please feel free to contact me directly if you have any further questions, I'd be glad to help.
All the best,
Roswell Moore, CMPS
Certified Mortgage Planner
We are a Direct Lender, Mortgage Bank where we originate, process, underwrite, fund, AND SERVICE our loans, in-house, with FHA (starting at a 580 score AND still only 3.5% down), FHA Streamline refinance loans (NO minimum credit score, NO appraisal required) Go Green rehab loans, HomePath, Investor Friendly (10 financed properties), VA, VA Refinance loans (NO appraisal required on IRRRL loans), USDA loans, Jumbo loans, Conventional loans, plus, we allow Escrow Hold-Backs!
Some Buyers think they can lie to the Lender to get the more favorable terms.
This could be a big mistake; very bad downside!
If it is an Income Property, there are all kinds of Tax deductions; it would be foolish to try anything untoward with the Lender.
Ron & Brenda Cunningham
West USA Realty
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