Our no-income loans are an excellent option for investors. Traditionally, loan products require extensive documentation of income, which can include bank statements, tax forms, and paystubs, among scores of other information.
This product, however, allows you to get financing without these documents. Whether you need to increase your chances of approval, or simply want to speed the qualification process, our no-income loans could be the perfect solution for your investment needs.
Top 3 Distinctions of our No-income Loans for Investment Property
1. You Can Use Future Rent for Qualification
With many loan programs, you have to use your current income as qualification, but if you are going to purchase an investment, you will increase your monthly earnings; shouldn’t you be able to work this future income into your application? With this loan, you can!
Income used to qualify the no-income loans for investment property is calculated in one of two ways. The first is through the use of future rent, which is determined by a professional analysis that considers the property in question, as well as the local rental market. If the estimated monthly rent is 1.1% of the mortgage loan or more, it can be used as the qualifying income for the loan. This essentially means that for every $100,000 you borrow, there should be $1,100 in rent. So if you are purchasing a property of $250,000, you will need $2,700 in rent in order to use this income for your purchase. With this option, you can finance 80% of the purchase.
If the rent does not cover 1.1%, there is an option that uses no income documentation, but it will have a slightly higher interest rate and will only finance 75% of the purchase, meaning you will need a 25% down payment.
2. Cash Reserves of Only Six Months
The second major advantage of this loan product is the fact that you only need six months of cash reserves. Cash reserves serve an important role in mortgage lending, as they reduce risk to lenders and, therefore, make lenders more likely to offer loans.
Cash reserves are simply funds held in savings. In the event of a financial crisis, such as the loss of a job, the cash reserves can then be used to make the mortgage payments. It simply makes lenders feel more comfortable if they know a borrower has cash reserves.
Cash reserves are generally calculated in months of mortgage payments. So if a lender requires two years worth of reserves on a mortgage that has payments of $2,500, you would need $60,000 in reserves. ($2,500 x 24 months = $60,000.) With many loans, you will need as much as a year or even two years worth of cash reserves. With this loan, however, you can secure no-income financing on your investment property with as little as six months of reserves.
Property owners can also use equity in their property as cash reserves, further increasing the availability of these no-income loans for investment property.
3. Flexible to Meet Virtually Any Loan or Purchase Type
With this loan program, you can complete virtually any type of mortgage loan on an investment property. From standard purchases of a single-family home, to cash-out refinancing on a multiunit property, there is practically no limit to your options.
Types of Loans:
The most common way to use this loan is a basic purchase: with our no-income investment-property loans, you can simply make the purchase of a property. A purchase loan for an investment property allows you to either increase your current portfolio of properties or to start a foundation of financial stability with investment property.
Rate or Term Refinance
The no-income loans for investment property can also be used for refinancing a loan on an investment property, either to secure a better interest rate or to have terms that better suit your needs. If you have an investment property with a high interest rate, it may be ideal to refinance, especially if there is a decade or more left on the loan. Refinancing for terms can also be effective. For example, you may be cash-strapped because of a 15-year mortgage on an investment property. Refinancing to a 30-year mortgage, which reduces monthly payments, could alleviate cash-flow issues related to your property.
Cash Out Refinance
If you have built significant equity in one of your properties but need cash for remodeling, businesses purchases, or simply want to make a new investment, you can use this program for cash-out refinancing, which will help you get the capital you need for a variety of uses.
Loans on Various Properties:
This is often the most common type of purchase, even for investment properties. With this loan program, you can purchase a single-family home, which is a property or dwelling with only one unit.
Multiunit Properties (Three or Four Units)
The program also allows for the purchase of three- or four-unit properties. With these properties, you are able to get multiple units in one purchase, which can reduce financial risk and increase the earning potential of certain properties.
Planned Unit Developments
A planned unit development, or PUD, is a community of homes that look like typical townhouses or single-family homes, but are operated more like a condo, with standards for the properties, homeowner’s associations, and communal areas such as lounges or swimming pools. Financing for these projects, especially as an investment, can be complex, but they are available through our no-income loans.
Warrantable and Non-Warrantable Condos
You can also use the no-income program for the purchase of an investment condo. Condominiums are generally more affordable and accessible to the typical buyer, especially people just starting their investment portfolio. With this program, you can purchase both warrantable and non-warrantable properties, making it especially useful for investors.
Work with Our Team for Excellent No-Income Loans
You deserve the best possible loans for your investments. Contact our staff and we’ll help you find the right no-income loans for investment property!