Natasha Shaw

If you are a seasoned Real Estate Investor, you will likely already know the pros and cons to owning Rental Property.  One of the challenges we face today are the ever changing lending criteria through the lenders, making it difficult to build on one's Rental Portfolio.  Therefore, you would know that by aligning yourself with an experienced Mortgage Professional is very essential in your quest to own 4+ properties over time.

If you are new to owning Real Estate, there is a lot of tricks of the trade to pick up and certainly an experienced Mortgage Professional will likely share their resources.  To start, let's consider some of the underwriting guidelines required for qualifying for a Rental Property.  We would love to expand on this section over time to shed some light on "How to Buy Rental Property" and "Landlording Tips" (coming soon).

Basic Requirements for Rental Properties

Acceptable loan purpose

• Investment Purposes
• Owner-Occupied + Rental (ie. Property up to 4-units that allows you to live with additional rental units "Mortgage Helpers") 

Loan-to-value ratio limits:

• Purchase: up to 75-80% LTV*
• Refinance: up to 70-75% LTV

*Please note that some lenders will only finance up to 65% LTV going to 75%LTV on exception.  Whereas, some will only go to 75%LTV Conventionally or 80%LTV adding an insurance premium - most are payable by the client (tacked to the mortgage amount).  There are only a few select lenders that may go up to 80%LTV Conventionally where a premium on the rate may apply.  

Max Loan Amounts:

• No Maximum

Eligible properties:

• Single to Multi-plex (Up to 4 Units - non commercial)
• Some lenders have restrictions on property location, size, etc.

Ineligible properties:

• Commercial Zoning
• Rental Pools
• Rooming Houses
• Quarter Shared/Shared Ownership
• Vacation Homes or Time-Share Interests

Terms/qualifying interest rates:

• Fixed, standard variable, capped variable and adjustable rate mortgages are permitted
• For terms less than three years, the qualifying interest rate is the greater of three-year posted rate or contract rate
• For terms of three years or more, we use the contract rate
• Some lenders may charge a premim on rate.

Amortization Options:

• In most cases 25 years
• In some cases 30-35 years

Click Here: For a more indepth review on the changes in Lender Guidelines concerning Rental Property Financing.

Contact me today for your Pre-Approval: 403-667-2978 or via email mtg@natashashaw.com