With interest rates at historical
lows and housing prices favorable in the New Mexico market, many people are
considering adding to their portfolio and purchasing an investment property.
This can be a smart financial move for many people. The value they save in low
interest rates can offset the cost of an investment property and prove to be a
prudent investment.
New Mexico consumers can expect to receive
a through review before securing an investment property loan. Prepare yourself
before you meet with a loan officer and come prepared to offer the required
documents and monies to secure your loan. The days of easy credit have passed.
However, that is not to say that you cannot obtain a loan. You can, you just
have to be prepared.
Ready,
Set, Go!
The key to obtaining financing
depends on knowing what an underwriter is looking for and how you can present
your documents and financial history in a good light. At your first meeting
with the loan officer, be prepared with the following paperwork:
· Assemble
your paperwork and documentation. Bring
copies of two month’s worth of bank statements, retirement, and investment
accounts. Be sure to include all pages of your statements. Have the last two
months of pay stubs for each applicant and bring the last two years worth of
tax returns. If you are self-employed, bring your business tax returns,
including profit and loss statements. Each applicant needs their driver’s
licenses, social security cards, and if applicable, bankruptcy discharge
papers, divorce and child support documentation.
· Know your
credit score. Lenders today demand good credit,
especially if it is for a property in addition to your primary residence.
Investigate your credit score with the leading credit reporters to see where
you stand. If your credit is sagging there are strategies you can employ to
increase your numbers. Be sure to pay on-time and avoid small dings to your
credit which can add up to serious damage.
· Secure a
loan. Each lender has different criteria
in terms of financing options. For a second home investment, some lenders
require down payments for as little as 5%. The same is true for non-owner
rental properties. A typical financing option would be a 20% down payment and
financing of 80%. This would hold with showing up to 10 rental properties on
your credit report. Of course, the larger your down payment, the better your
rate and ability to finance an investment property would be. Lenders today
scrutinize and pore over your financial records and investment history to
ensure you are a good candidate for a loan. In many cases, cash is king with
investment properties so be prepared to potentially put a sizable amount down
on an investment property as well as bring documentation that proves the value
or the ability to rent the property and achieve a positive cash flow.
Finding the Right Investment Property Loan
When you are ready to move forward
and secure an investment property loan in New Mexico or the surrounding states,
call Indigo Mortgage at 505.836.5700 and schedule an appointment with one of
our loan specialists. We will work with you to determine the best investment
loan for your particular situation. No
one cares more about your loan than we do, and we want to prove that to you!
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