Mortgage Question

2 Replies

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

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).

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!