- November 14, 2014
- Posted by: Michael Meyer
- Category: Uncategorized
Northeast Financial is your Connecticut resource for purchasing investment property in our State. We offer two programs that assist investors in closing investment real estate.
Residential Property Investment Loans:
Non owner occupied investment properties have to be from 1-4 units (condos as well). Generally you will need to put 25% down on investment properties, have reserves of 6 months of PITI (principal, interest, taxes, and insurance) payments, a credit score of 640 and higher, and the property must be in good condition in order to pass through an appraisal. This type of loan is done as a conventional mortgage – which is great for investors because rates are still at historic lows.
One way to buy an investment property that you will live in is to go the FHA route. This option allows you to buy up to a four family home. This is a great option too because you only need to put down 3.5 percent. Also the debt ratios are much higher which allows the borrower to buy more of a house.
Commercial Property Investment Loans:
Doing a commercial mortgage is a different process than that of doing a residential loan. The investment property will still have to be non-owner occupied and in many cases you will be required to sign the loan as an individual as well as a LLC/Corp. Units can be between 1-4 and 5+ (as well, Mixed Use Properties are allowed). This is a Stated Income program (also known as light documentation) and requires a minimum credit score of 650. Appraisals are roughly between $995 to $1,200. Similar to residential loans, your max loan to value is 75% (but you can have a seller 2nd mortgage of up to 10% – which can lower your down-payment) and you will need 6 months in reserves. A major difference between the two programs is that Commercial Mortgages are only fixed for 3 or 8 years (amortized over 30 years) and the rates are higher (starting at 7.5%).
I would like to talk with you about your loan scenario for your upcoming investment property purchase (we do refinances as well). Call me today for a free consultation.
David Tortora NMLS 88166
Company NMLS 117273
210 South Main Street
Middletown CT 06457