Is it necessary to put down a deposit when getting a mortgage for a property one intends to rent out?

Answer 1

If you plan on living there, you can get 100 percent financing, based on your middle credit score of 580 or higher. If you already have a home (mortgage) on another property, than this would be considered a investment property- in that case you would have to bring in anywhere between 5-10 percent. Depending on the lender you choose. I have seen 100 percent financing on Investment property's - but your credit would have to be in in the 700's - and most lenders are shying away from 100 percent investment loans. When you close on a loan, there is a form that states you intend to occupy the property as your own residence.

Answer 2

Depends. Good credit? Bad Credit? How much is the mortgage? How much would you need to rennovate to rent? Do you already have a renter setup/in the pipeline?

I can get 100% loans on decent properties no problem with a 720+ credit score. Pay a bit more than i would with 10% down so always keep that in the back of your mind. If its a short term rental and you looking to maximize cash than you should look at your mortgage situation to see if putting down a deposit will give you any better return.

I typically have always had some sort of cash deposit if not for just simply holding the property while i work out a mortgage so in some respect cash is almost always involved but you can ask for a deposit back or reduce the purchase price of the house depending on how you sign the dotten line.

Answer 3

Regardless of how you intend to use the property, the Seller wants to know in good faith that you are able to purchase the property and that if you walk out, then they have some money to get back for taking it off the market while you finish the buying process. We call it and earnest money deposit. The larger amount a Buyer puts down, the more they really intend to follow through with the purchase. It's also the amount they stand to lose if they just 'change their mind', though getting it back can be tricky sometimes.

Answer 4

When you get ANY mortgage, it is given subject to the legal demands and requirements of the lender.

Some require a specific percentage of the loan, some may require a guarantee... each lender is likely to have small differences. On top of those factor in YOUR capabilitis.

Do you have a good credit score, do you have a steady and reliable income, etc... those will also affect the terms of the loan.

Lastly, rental properties are actually LESS desireable to many lenders because of the potential for loss. Bad or deadbeat tenants, legal exposure that risks the building, all of these are greater then in a single family home, and therefore the lender will usually charge a higher rate and require a greater down to protect their interest in the property.

Bottom line: I wouldn't mention to the lender it is a rental unit unless he/she/it asks. If you are going for a zero down loan good luck.

Answer 5

It depends. 100% investment programs are almost a thing of the past. Meaning they are no longer offered and if you find one the rates are probably through the roof. It also depends on if you are going to move into this home first and then buy another home and rent out that house. Simply because there is a huge difference on rate and loan programs from owner occupied to non-owner occupied. This is all assuming you have the credit and income to support it all. Good luck!

Answer 6

Most likely. Mortgage companies expect more down if the property is not going to be "owner occupied." They will not finance 100% if you let them know that it is an investment property and not a home.

Answer 7

What do you mean a deposit? Like a down payment?

If so, then ussualy Yes, the banks typically require some form of down payment and closing costs to clost out all mortgage loans.

Answer 8

see a broker.
he will get you what you want.