How to Get a Loan to Buy a Rental Property

The moment you decide to invest in a rental property is the moment when you need to get a rental property loan. And here’s how.

Hey, you! No…not you… the other person reading this. Yes…YOU! We heard you want to invest in a rental property. Smart move. Owning rental properties area great way to generate a passive income stream that can help you from now until retirement, not to mention that it diversifies your investment portfolio and creates an asset that grows in value over time.

So, you’ve made the wise decision to buy a rental property (again, good on ya) but now you need a rental property loan to get said rental property. And at this point you might be thinking, “Ummm…how do I get a loan to buy a rental property, anyway? It seems complicated. Maybe I should just forget the whole thing.”

Yeah…don’t do that.

It might seem daunting to get a loan to buy a rental property, but we’re here to tell you it’s not. (Especially when you’ve got a money lender like The Loan Guys to help you out.) All you need is the right info to get started. Knowledge is power, ya know? And once you have that knowledge, you’ll understand that applying for a rental property loan is not only pretty simple, but you’ll be kicking yourself for not doing it sooner. So, let’s dig in, shall we?

On the surface, a rental property mortgage is essentially the same as a primary residence mortgage. However, there are some important differences to understand. The good news is that rather than a conventional loan where money lenders pour over your tax information, a rental property loan is approved based on the value of the rental property or the rental income of the property. The approval process tends to be a little quicker as well, which is perfect if you’ve found the ideal property and wanna jump on it quick.

A rental property typically needs to fit into one of the following categories:

*Condo

*House

*Single-Family Unit

*Multi-Family Unit

Generally, you’ll need to stick with one to four-unit properties when you apply for a rental property loan. If you want to buy an investment property with more than four units, you might need to consider a commercial residential loan or an apartment loan as an alternative. (But let’s not go there, shall we?)

Now, a rental property loan has slightly different parameters than a home mortgage loan — it’s not “one size fits all,” ya know? With a rental property loan, you typically have more of a down payment to make, as well as higher interested rates attached to the loan. Why’s that? Well, when it comes to approving a mortgage on a rental property, lenders are a little more stringent in their requirements. Because the owner will not be occupying the property, potentially transient occupants may adversely impact the property’s value, making the risk for the lender much greater, hence, the bigger down payment and higher interest rates.

All of this means that when you are finally ready to apply, you’ll want to be prepared. The better you look (on paper we mean…you’re beautiful IRL), the better your chances are for getting approved. This means:

*making sure your credit score is on point (640 or higher).

*making sure you can make a down payment of at least 20%.

*making sure you have a six-month cash reserve of mortgage payments.

*making sure you pay off as much existing debt as you can.

*making sure all your paperwork is in order.

Of course, one of the most important decisions when looking to get a rental property loan is finding the money lender that is right for you. You want to find someone who is willing to work with you and your specific needs. That’s where The Loan Guys come in. The Loan Guys have a rental property loan program that makes it easy for real estate investors to acquire their rental property quickly… like, 12-14 days quickly. They also offer…

*Up to 80% Loan-to-value on single-family residence, 2-4 units, condos, and townhomes.

*Purchase, refinance, or cash out options available.

*Minimum credit score of 640+ for 1-4 units and condos.

*Loan term 30 years fixed/fully amortized.

*Hybrid ARM options available, 5/1, 7/1, 10/1 Amortized over 30 years.

*10-year interest only option!

*20% down payment required.

*Blanket Loans available.

*NO income verification required.

*NO DSCR option available!

See? Once you break it all down, getting a loan to buy a rental property isn’t so complicated. Getting a rental property loan, investment property loan, or even a fix and flip loan doesn’t have to be the mysterious process everyone makes it out to be,  But if you still got questions, The Loan Guys have got answers.  Cause once you know, you know.