We have heard it is good to save some money for rainy days. The savings could be in any way; you can open a savings account or invest money in Real Estate. In this blog, we would discuss an investment/Rental Property thoroughly and provide some tips to First-Time Investment Property Buyers.
What is an Investment Property?
An Investment Property is a Real Estate property which is purchased to get some good returns. You can earn profit either by renting it or selling when this property is in higher demand.
What are the eligibilities to get a mortgage?
• Minimum 20% down payment
• Credit history should be in good standing.
• Better Debt-to-Income ratios (it is a ratio that compares a person’s or a family’s debt to their disposable income. How much amount of debt you owe for every dollar of your income)?
• You must need qualification documentation such as job letters, pay stubs, your taxation documents, etc. For further information, call MB Mortgages today.
Why are mortgage interest rates higher for an Investment property?
Real Estate investing can turn the investment into a lucrative amount in the long run. However, its opposing sides can not be ignored, such as problematic tenants, negative cash flows, high vacancy rates and unfriendly locations. It is hard to predict the nature of real estate market which forces lenders to put second thought on lending money for Real Estate Investment.
Tips for First-Time Investment Property Buyer?
1. Save for down payment- If you are looking to buy an investment property, make sure you have a minimum 20% down payment along with 1.5%-2% closing costs of the purchase price as mortgage insurance is not available for rental properties.
2. Avoid fixer-upper properties- Fixer-upper properties are considered a high-risk investment. They do not assure you that you will end up with a good return if you spend money on renovation. If you are investing first-time in Real Estate, make sure you are buying a house good in condition.
3. Pay off your debts first- If your credit history already shows student loans, credit card loans, car loans and so on, make sure you are paying them off first. You can opt for a Second Mortgage which would help you to consolidate debts. Eventually, it will help you earn a good credit score. If you already must pay these high-interest debts, it is not a good time to purchase investment properties. Also, lenders will consider you a high-risk candidate.
4. Aware of high-interest rates- Rental properties come with high-interest rates as they are considered a higher-risk investment. The risk can be high vacancy rates; tenants are damaging property, expensive maintenance, and bad locations.
5. Purchase a low-cost house-The higher the price of your house; the higher your monthly expenses would be. Some experts recommend beginning with small house in a desirable neighborhood. Furthermore, experts warn against buying the nicest house on the block and the worst house on the block. If you have any further queries to buy a rental property, please contact MB Mortgages and will guide you through the whole process prudently and diligently.
Why choose us-
As a leading Mortgage Brokerage, we have strong relations with multiple banks and numerous lenders. We work with Canada’s leading lenders to provide you a mortgage solution that fits your budget. Our mortgage and financing process is amazingly simple, we represent you and match you with the best suited mortgage as per your needs. This way we can guide you through this complicated process with our years of mortgage financing experience.
• We are dedicated and professional Accredited Mortgage Brokers in GTA.
• We are well trained and have experience in the mortgage financing field more than 10 years.
• We can shop around with different lenders to get you the best possible mortgage rates and conditions as well.
• We have different options for different income and credit level with access to number of private lenders to suit borrower’s needs.
We are a professional mortgage broker in GTA. We can help you secure a mortgage with best mortgage interest rates. We are located at 2 County Court Blvd., Suite # 438, Brampton, ON L6W 3W8. Call MB Mortgages Inc. today at 905-458-6929/416-939-7131 for your queries or you can email us at: [email protected] or you can visit our website at www.mbmortgages.ca
The information provided in this blog post is intended to provide general information. You should consult with a mortgage professional to fully determine the scope of your situation. MB Mortgages shall not be held liable from usage of the information provided on this page. Individual situation may vary.