Get ready to make your next property purchase.
Purchasing a Second Property
Intention to Rent
Who Can Qualify
You might be surprised to learn that you don’t need to be one of the uber rich or make six figures to have second properties. You just need to have knowledge, determination and a financial plan!
When it comes to purchasing a secondary property, whether for investment, rental or vacation, it can be a great opportunity! Before taking on a secondary property, you will need to have your down payment in order (whether from savings or home equity) based on the minimum requirements. It is also important to have a sufficient credit score to qualify (680 or higher) for a conventional mortgage. However if your credit score has not reached 680, there are still options. Alternative or B Lenders can be great solutions for individuals with credit challenges, while still helping you purchase your dream home!
In addition to the down payment, you will also need to pass the stress-test to prove that you can financially carry both mortgages. Also to keep in mind, there may be potential barriers with lenders as most will limit the number of mortgages within a portfolio. If this is only property number two or three, you shouldn’t have any concerns. However, as you expand your portfolio, you may run into a limit at five properties (at which point you would be considered a commercial file).
written by DLC teams