Can someone give this newbie a quick and dirty idea of what lenders look for when I go to qualify for a loan for an investment property? Do I need to have a specific property selected before going to a lender?
I've heard that lenders want to see that 75% of the rents can cover the mortgage pmt, taxes, and insurance. There must be more! Even if those numbers work out, won't the lender want to know what my personal financial situation is (debt to income ratio, FICA, etc..., all that good stuff that the lender looked at for my personal residence)?
Thanks, as always.
uh, I meant FICO, not FICA.
The easiest way to do this is to talk with a mortgage guy or gal and ask for a pre-approval letter. You might need to show bank statements, investment account statements, pay stubs, tax returns, financial statements for any businesses that you own. The mortgage company will pull your FICO on their own so you're just wasting time if you try to bring a credit report with you.
When you get the pre-approval letter it will give you a dollar amount that they will lend to you. This is just a ball park idea though... they won't actually lend money to you until you bring the actual details of the property to the lender.