How to Get an Investor Mortgage

If you plan to purchase real estate property with the intention of earning a profit from it, you will need an investor mortgage to fund the purchase. There are several benefits to using an investor mortgage, but it may also be harder to qualify for. By planning appropriately and making sure your credit and finances are in order to take on such a large investment, you can eliminate some of the headaches along the way.

Instructions

Difficulty: Easy

1. Obtain your most recent credit report. If you have any errors, report it to one of the three credit reporting agencies.
2. If you have reported an error, expect to wait a minimum of 30 days before you will see any change to your report. Hold off on qualifying for a loan until your report is in order and your score is as high as it can be.
3. Prepare all financial documentation: Provide W-2s for the last two years, bank statements, employment information for the past two years and, if you are married, your spouse’s financial information.
   
4. Research the various types of investor mortgages there are to find one that best fits your needs. This will depend on what type of property you are purchasing as well as if you plan to sell the property quickly or hold onto it for a while.
5. Research lenders who specialize in investor mortgages. Submit your information to each of them and obtain quotes or a good faith estimate.
6. Determine which lender can offer you the best deal in terms of closing costs, interest rates, etc. Decide which lender you feel confident in working with throughout the purchase process.

Tips & Warnings

• Many investor loans will have a higher minimum credit score requirement than conventional loans in order to qualify. Generally the minimum required score is 625.
• Keep all financial information and documents that you will need to qualify on hand in a folder. This will take some of the headache out of working with a lender during the qualifying and purchasing process.
• If you are unsure of how one loan product differs from another, don’t be afraid to ask the lender you are working with to explain the differences to you and which one would be better suited to your needs. They are the professionals in this scenario and it is their job to know, not yours.
• When looking for a lender, word of mouth is one of the best ways to find one. If you know of anyone who has also gone through an investor mortgage in the past two years, they may be able to point you in the right direction.
• Be wary of lenders whose only business presence is online. It is possible for online lenders to take advantage of unaware buyers. Research your lender before you sign on the dotted line.