Taking the leap into rental property ownership can feel daunting, especially when you're new to the game. You're not alone in wondering how to turn your investment dreams into reality. With the right financing strategy, you can start building wealth through real estate.
”At NMHL, we work with borrowers in exactly this situation every day. We understand the uncertainty, the frustration, and the worry that comes with navigating a mortgage during a significant life event. You are not alone, and your situation does not have to be a barrier to homeownership.
Our licensed loan officers specialize in finding the right path forward for borrowers in complex circumstances. Whether your situation requires specialized documentation, alternative qualification methods, or simply a lender who takes the time to understand your full financial picture, we are here to help you move forward with confidence and clarity.
Your Path Forward
Proven Solutions for Your Situation
Conventional Investment Property Loan
A conventional loan for your first rental property requires 15-25% down and good credit. You can finance up to 10 properties with this option.
DSCR Loan for Rental Income Qualification
DSCR loans qualify based on the property's rental income, not your personal income. This is ideal if you're counting on rental income to help qualify.
FHA Owner-Occupied Multi-Unit Financing
With FHA financing, you can put just 3.5% down on a 2-4 unit property where you live in one unit and rent the others. Rental income from the other units helps qualify for the mortgage.
NMHL Pre-Approval for Investment Properties
Get pre-approved with NMHL for your first rental property and understand your financing options upfront. Our pre-approval process considers your overall financial situation, not just your credit score.
Personalized Guidance for Your Situation
No two mortgage journeys are alike. Our experienced advisors take the time to understand your unique circumstances and find the best path forward.
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Understanding Your Rental Property Financing Options
When buying your first rental property, understanding your financing options is crucial. NMHL offers conventional loans with 15-25% down, DSCR loans that qualify based on rental income, and FHA loans for owner-occupied multi-unit properties.
- Conventional loans are straightforward and allow up to 10 financed properties.
- DSCR loans use the property's rental income as the primary qualification factor.
- FHA loans require just 3.5% down on 2-4 unit properties if you live in one unit.
Get pre-approved with NMHL to understand your financing options upfront.
How Much Do I Need for a Down Payment?
The down payment for a rental property varies by loan type. Conventional loans typically require 15-25% down. FHA loans require 3.5% down if you're buying a 2-4 unit property and living in one unit. DSCR loans usually require 20-25% down.
Your down payment affects not just your upfront costs but also your interest rate and monthly payments. Consider your financial situation and investment goals when deciding.
Use NMHL's mortgage calculator to see how different down payments affect your monthly payments.
Using Rental Income to Qualify for Your Mortgage
Rental income can significantly help when qualifying for a mortgage. Conventional lenders use up to 75% of the projected rental income to help you qualify. DSCR loans go further by using the full rental income as the primary qualification factor.
This can be a game-changer if you're counting on rental income to support your mortgage payments. Work with an NMHL mortgage specialist to understand how rental income can help you qualify.
NMHL's DSCR loan program is ideal for investors relying on rental income to qualify.
Tax Benefits of Owning a Rental Property
Owning a rental property comes with significant tax benefits. You can deduct mortgage interest, property taxes, insurance, maintenance, depreciation, and property management fees. These deductions can reduce your taxable income substantially.
Consult with a tax professional to understand the full benefits for your situation. NMHL's mortgage specialists can also guide you on how different loan options affect your tax situation.
Keep detailed records of your rental property expenses to maximize your tax deductions.
Getting Pre-Approved for Your First Rental Property
Getting pre-approved is the first step towards buying your first rental property. NMHL's pre-approval process considers your overall financial situation, not just your credit score.
Gather your financial documents, including tax returns, bank statements, and credit reports. Our mortgage specialists will review your financial situation and provide a pre-approval letter stating the approved loan amount and terms.
Start your pre-approval process with NMHL today to take the first step towards your first rental property.
Frequently Asked Questions
For conventional loans, you'll typically need 15-25% down. FHA loans require just 3.5% down if you're buying a 2-4 unit property and living in one unit. DSCR loans usually require 20-25% down. Your down payment affects your interest rate and monthly payments.
Yes, you can use projected rental income to help qualify. Conventional lenders use up to 75% of the rental income. DSCR loans go further by using the full rental income as the primary qualification factor. This can significantly help if you're counting on rental income to support your mortgage payments.
Rental property owners can deduct mortgage interest, property taxes, insurance, maintenance, depreciation, and property management fees. These deductions can significantly reduce your taxable income. It's best to consult with a tax professional to understand the full benefits for your situation.
Conventional loans are straightforward but require more down. FHA loans are great for lower down payments if you're living in the property. DSCR loans are ideal if you're relying on rental income to qualify. Consider your financial situation, credit score, and investment goals when choosing.
To get pre-approved with NMHL, start by gathering financial documents like tax returns, bank statements, and credit reports. Our mortgage specialists will review your financial situation and provide a pre-approval letter stating the approved loan amount and terms.
Yes, you can finance multiple properties. Conventional loans allow up to 10 financed properties. DSCR loans have no limit on the number of properties you can finance. FHA loans are limited to owner-occupied properties, so they're best for your primary residence or a 2-4 unit property you live in.