One of my specialties is investment loans and Nova has multiple lenders offering this loan product including a source that will allow for up to 10 properties with mortgages. Most lenders only allow for 4 properties with mortgages.
For the regular program, here are some things you should be aware of:
- 20% down payment minimum (unless you find a Homepath eligible property in which case 10% is the minimum down payment.) If you put 25% down, you get a lower interest rate.
- appraisal costs a little more due to the required “rent schedule”.
- be sure to check on reserve requirements. Typically, you will need to have 6 months PITI for this property, 6 months for any other rental property and 2 months worth for your primary residence. For example, if I have a primary residence with a $1250 payment and the new payment will be $600, I will need to have ($1250 x2= $2500 plus $600 x 6= $3600 for a total of $6100) $6100 after closing in reserves. Keep in mind, FNMA views liquid funds at 100% of value, brokerage assets or mutual funds at 70% and retirement funds at 60% when calculating reserves.
If you need some help figuring if a property will cash flow, call me or a licensed realtor. With property values at 10 year lows and rates as low as they have ever been, 2013 could be a good year to start working on your rental portfolio.
Call or email me with any questions.
Senior Loan Officer
Nova Home Loans