An investment or rental property may be a good option for people who are looking to make additional income. This extra money could be made by renting space on the property, or by making improvements to a house and reselling it for a higher value. Regardless of your intent, it is often easier to fund this decision with a mortgage.
Rental properties can make excellent sources of revenue for the ambitious investor, inspiring increasing numbers of people across the US to look at investment properties as the best supplement to their own personal incomes.
However, first-time buyers often find that purchasing a rental property turns out to be much more complicated than they had imagined. This is particularly true when it comes to qualifying for that all-important additional mortgage…the rental property mortgage.
Financing the purchase of a rental property is not the same as financing a primary residence. Lenders tend to be more reticent about underwriting loans on rental properties, and first-time buyers should be prepared to meet some fairly stringent requirements before they can expect to be approved for a mortgage.
Though it seems daunting, it is more just a matter of understanding. You must clearly understand how a rental property is legally defined, and the extra qualifications a lender will be seeking from borrowers to grant a mortgage for a rental property.
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