Buying Rental Property: What You Need to Get an Investment Property Mortgage
With the housing market hitting rock bottom prices around the country, many people are rethinking their investments. For some this has them looking into buying rental property and taking advantage of the low prices, with the added bonus of earning equity for retirement and a monthly income from rent. Banks however, are not freely approving investment property mortgages as they once did. To qualify for an investment property mortgage you will have to have a significant amount of cash set aside for the bank to even considering approving you for a loan. This will give you a general idea of how much cash you will need on hand if you want to apply for an investment property loan. Basic Calculation Calculate about 25 percent to 30 percent of the home’s purchase price. This is your target amount of money to save. For example, if the purchase price of the rental home is $150,000, then you will need between $37,500 and $45,000 in the bank. This will cover the down payment and closing costs. I
