At Coburn & Feeley, we
know that an investment property can be an important part of your portfolio.
vacancy at less than 2% in Chittenden County,
investment property has become an attractive option to many potential
buyers. Mark Benton, a Mortgage Plannerwith Regency Mortgage Corp. shares some great information if you’re considering
a real estate investment property. Mark says that there are three major factors
that will influence your investment property purchase:
Conventional fixed rate financing is available for single
family homes, condominiums, and 2-4 unit properties. Properties with 5 units or more will need
The down payment is the first important piece of investment
property financing. Typically, 25% down
payment is required for purchase. There
are some options with 20% down payment for a single family investment purchase,
but interest rate and points will be higher.
A strong credit score is also key. You will always get the best pricing with a 740
or higher credit score.
Reserves requirements have increased as part of the
financing process. Typically, you will
need to show 6 months of housing payments (mortgage, property taxes, and
insurance) for the property to be purchased, along with 2-6 months reserves for
each additional property depending on the total number owned.
With investment property inventory in short supply, it is
very important to get pre-qualified for your financing before going out to look
at properties with a realtor. Knowing
all of your options upfront means that when you find the right property, you
can act quickly.
Purchase and refinancing options with fixed rates are also
available to investors who own 4 or more rental properties.
Mark Benton is a Mortgage Planner with Regency Mortgage Corp,
located at 3 Baldwin Avenue in South Burlington, Vermont (NMLS 94675).
He can be reached at (802) 448-2802 or firstname.lastname@example.org.