Real estate can be one of the best ways to invest your money. Not only are you investing in something that steadily gains in value (in most cases), you are purchasing a physical asset that brings a steady cash flow to your bank account. For these reasons, it has become one of the most popular investment choices for people of all ages.
But there are challenges to investment properties. They usually require more work than simple market investing, and they may have a higher risk, especially when they are not managed with attention. There is the other challenge of higher risk for no regular returns; if the property sits empty, it’s not bringing an income; in fact, it could be draining money because of taxes, utilities, and upkeep.
There is another issue for investment property: it can be limited by lenders. Most people simply don’t have the finances to purchase investment properties outright. Therefore, to take advantage of this excellent opportunity, they turn to investment-property loans. But with many loan programs, you can only purchase a few properties at a time; there are limits to how many you can own and still get financing.
Our team is proud to provide a wide variety of loan options for investors, including unlimited non-qualifying-mortgage programs.
What is a Non-Qualified Mortgage?
If you are in the market for a home, but don’t meet the borrower requirements for a typical mortgage, you may use what’s called a non-qualifying mortgage. These loans are not just for personal homes, but can also be used for investment properties.
The details can be a bit tricky, so to best understand a non-qualifying mortgage, it helps to learn about qualifying mortgages. To be approved for a typical mortgage (a qualifying mortgage), you need to meet specific requirements. You need the appropriate income, as well as a manageable debt load. The loan itself needs to meet a variety of specifics, including loan features (no risky features) and loan length. (Usually needs to be 30 years of less.) If you can meet these requirements, the loan can likely be backed by one of the major government agencies involved with home loans, including the FHA, VA, and USDA, or government-supported groups like Fannie Mae and Freddie Mac.
Some of these loans can be used to purchase investment properties. But many have severe restrictions on how they can be used for investments; if you or the loan do not meet these standards, you may need to use a non-qualifying mortgage.
Non-qualified mortgages are used by a variety of different borrowers. They are great for retirees, but they can also be useful for self-employed professionals who do not have a consistent weekly (or bi-weekly) income. They can be beneficial for a full-time real estate investor, and foreign nationals can also use non-qualifying loans when other options are not available.
While useful for unique property buyers, these loans can be hard to come by and may not be available through all lending groups. They can come with higher interest rates, and the fees may be higher than non-qualified-mortgage loans.
Benefits of Non-QM Programs
Finance Limitless Amount of Investment Properties
One of the biggest challenges for using non-qualified-mortgages is a limit on the amount of investment properties you can have financed. While the specific number will vary depending on the product and the lending agency, you may be forced to cap the amount of investment homes you can finance. For example, if you have mortgage loans on 10 rental properties, you may be unable to use a qualified mortgage.
But with our financing options, you are not limited. This allows you to build an outstanding portfolio of investment properties, and as long as you are managing the monthly debt load compared to the rental income, you can continue to build your rental-property portfolio. For this reason, many experienced investors, who already have dozens of properties, choose these mortgages.
Reasonable Interest Rates
Our loans also bring reasonable interest rates. Mortgage lending is all about risk reduction, and lenders use a variety of factors to measure and reduce the chances of a default on payments. Loans with high downpayments, for example, are less likely to default; and if they do, the downpayment helps the bank reduce potential losses. Keeping credit scores high and debt-to-income low is another way that lenders can reduce risk.
Another way is interest rates. Simply put, the higher the risk, the higher lenders will charge in interest. Because investment property loans and non-qualifying mortgages, which are not supported by government agencies, have higher risk, lenders charge more in interest.
But our loans are available with lower interest compared to much of the competition. We believe investors should have access to low-interest loans, and we do our best to find affordable financing for your investment purchase.
Fixed-Rates Loans Available
If you want to create stability in your investment portfolio, it may be best to avoid adjustable-rate loans, which can change interest rates and therefore create issues with your debt obligations. Many programs only offer non-qualified-mortgages in adjustable-rate, or “ARM” loans, but we can help you secure this form of financing with a fixed-rate loan, perfect for the investor who want greater predictability with their portfolio.
Large Financing Available
The specific can change depending on what income you use for qualification, but when you use these loans you can get financing up to $3 million! This means investors who qualify have access to significant purchasing opportunities.
High-Quality Loans for Your Investment Goals!
If you want a top-quality loan for your next investment purchase, contact our team today. We are proud to serve San Diego, California and many other areas across the country. Whether you need a loan for your first home or want to purchase your 20th investment property, we’ll do everything possible to make it a reality!
EXCEPTIONAL, SUPER EXCEPTIONAL! The most professional, accountable and committed mortgage service we have ever worked with. With numerous experiences in buying and refinancing homes, by far Chad Baker and his team remain at the top of our list. We feel very blessed to have located such a committed company who serve their clients with an exceptional first “first class” mindset.
“We’re loving our new place and we’re very pleased with how smoothly everything went through closing. Thanks for keeping us up to date on the possibility of refinancing at a lower rate; we trust your judgement as far as waiting until the rate is around 5% lower before we refinance. We’re very interested in pursuing that if rates drop to that level. Thanks so much for all your help and personal attention!”
“Chad Baker is THE BEST, most professional, understanding, HONEST person I’ve ever worked in the mortgage industry. He knows exactly what he’s talking about, will never promise something he can’t deliver, and will bend over backwards to get you what you need. I had a very unique problem qualifying and every other mortgage company I worked with assured me from the beginning that they could get me financed, and then it would all fall apart once we hit underwriting. Chad understood my circumstance from the beginning and patiently explained every step of the way. I can’t thank you enough Chad! Juliann has been great keeping me updated and making sure that everything comes together in a timely fashion. She also appreciates my sense of humor, which gives personality to a boring funding process. Thanks Juliann! I HIGHLY recommend Home Point and if I ever buy another home, will absolutely use them again.”