Mortgage Question

Mortgage Question

Member since 2008 · 2 posts · 0 votes

Let me start by saying I am 22 years old and looking to move out. I am very unexperienced and have been doing quite a bit of research the last couple of months and still have some questions I cannot seem to answer. The thing is I would like to buy a 4-plex or something bigger if I can afford it hopefully with an FHA loan. I would want to live in one of the apartments and have the other tenants pay my mortgage. I understand what and how I want to do it, the question I have is for the future when I want to expand and buy more investments will this be a problem since I have a mortgage. I may not be explaining this very well, but I am basically afraid of capping myself out credit wise that I will not be approved to buy more investments and that is the whole goal. If someone could give me some insight on how mortgage companies would look at this I would be very grateful. Thanks -Matt

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  • Dayton, OH · Member since 2008 · 517 posts · 17 votes
    20y

    The most that you can buy through FHA is a 4 unit building. The key thing to remember is that lenders will compare debt to income along with credit score. Lenders should give you credit for 75% of your rental income so you will want your monthly PITI for an investment to be 75% of gross rent (or less).

  • Real Estate Investor · Member since 2008 · 46 posts · 2 votes
    20y

    Don't let that stop you! one of my mentors told me to never let financing kill a good deal. if you find a deal that makes sense, and money, then buy it. Taking on a loan and paying down the mortgage will help build your credit, and your credibility with the bank.

    also, talk to a local banker about the idea. if you come in with a teachable attitude, then they will most likely be helpful to you and offer advice and suggestions. don't act like you've got it all figured out. nobody wants to help a person with an ego.

    that is great that you're buying a deal! Good luck!
    Deyl

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