I'm purchasing a home for $400,000 to rent it out.
I can't afford a $40,000 down payment.
Are there any types of loans I can take out, what are the negatives and the positives?
2007-07-24 14:59:32 · 7 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
Can I choose my down payment amount, too?
2007-07-24 15:04:06 · update #1
You will be extremely fortunate to find financing for a $400,000 home with no downpayment if you are not going to owner occupy. Lenders do not use the same downpayment criteria for investment property as they do for owner occupied single family properties.
I do not recommend getting involved with rental property with a no downpayment scenario. You are simply asking to find yourself short on a cash flow basis, if not in a NEGATIVE cash flow basis.
2007-07-24 15:07:05 · answer #1 · answered by acermill 7 · 1⤊ 0⤋
I am sure you can if you have a good enough credit score and a good debt-to-income, but you should really look at if you will be able to make any money on the home. You will not only have to cover the interest of the loan with the rent, but also the taxes and PMI. With that size of a loan I am sure taxes are pretty high depending on where you are located.
2007-07-25 00:13:38 · answer #2 · answered by ChicagoGuy 2 · 0⤊ 0⤋
You can only buy a house with no down if you have great credit and if your income allows it and if your debt to income ratio is good. However if you don't put any money down then you have to pay mortgage insurance in your loan till you have at least 20% equity in your home. If you can't afford a down payment then how are you going to afford a $400,000 home.
2007-07-24 22:03:59 · answer #3 · answered by Anonymous · 0⤊ 0⤋
In today's softening market it is tougher than ever to obtain mortgages for higher loan to values (smaller down payments)on investment property. Those properties represent the highest risk to lenders (Fanniemae or Freddiemac) and foreclosure ratios on rentals are in triple digits in some areas of the united states. But I did some research for you and came up a couple of websites that may give you more information on programs available that might help. Just keep in mind that the fees and rates assciated with thi
2007-07-24 22:58:36 · answer #4 · answered by Etta P 4 · 1⤊ 0⤋
Yes you can, but it depends on you fico. If its a rental its probably going to be a little harder. And also with 100% financing your rate will be high. Try and see if you can put 5% down, this might help your rate.
2007-07-24 22:05:54 · answer #5 · answered by Anonymous · 0⤊ 1⤋
some negatives are the high interest rates and the penalties that you will have to pay if you are late.
2007-07-24 22:02:43 · answer #6 · answered by Anonymous · 0⤊ 0⤋
you'll have ALOT of interest!
2007-07-24 22:02:22 · answer #7 · answered by m&fn princess 3 · 0⤊ 0⤋