Find An Investment Mortgage

A key opportunity in Sonoma County is buying an investment real estate and subsequently getting an investment mortgage. Over the years non-owner occupied mortgage loans have gotten tighter in terms of stricter mortgage loan underwriting criteria.

You can purchase a property in Sonoma County with an investment mortgage and positively cash flow the property after expenses are paid.

Find investment mortgage and see how the numbers work.

Here’s an example of $300,000 house 25% down ( $75,000) the total house payment including property taxes and insurance is $1416.86 per month, assuming a 4.25% 30 year fixed-rate mortgage. Assuming rents of $1700, that’s positive cash flow of $231.14 per month. That’s a 3% return on your money. If you factor in taxes, nearly the total mortgage payment is tax-deductible. So the return is even greater.

Some things to be mindful of when getting investment property mortgage.

  • 20% down is the minimum down payment needed to buy an investment property. The interest rate on the investment mortgage will be better by putting 25% down. There is what’s known as a low-level pricing adjustment that is applied at an 80% loan to value non-owner occupied transaction. That low-level pricing adjustment is reduced in exchange for the extra 5%.
  • You do not need a lease agreement for the property you are going to be purchasing as an investment property. The appraiser when doing the appraisal will also generate an income analysis for the property being financed as well as provide comparable market rents. These items are used in lieu of meeting a lease agreement.
  • The minimum credit score for investment mortgage is really 700. Can you get an investment property mortgage with a credit score below 700? Yes you can however the interest rate and the inherent cost of the mortgage dramatically rises because of the perceived level of risk Fannie Mae or Freddie Mac would be allowing.
  • 75% gross market rents-mortgage lenders will allow you to use 75% of the gross market rents when purchasing an investment property. If you have gross rents of $1400 per month the amount that can be used for qualifying purposes will be $1050 per month.
  • Some lenders require a 12 month history of being a successful landlord depending on your purchase transaction. This is a red flag and it’s a lender that you should be wary of because they have over stringent underwriting guidelines.The stipulation here is that if there is a documented 12 month history of being a landlord there is less risk in allowing you to purchase a new investment property.

What are interest rates like on investment mortgage?

Well remember how we were just discussing with low-level pricing adjustments? These are items which are added to the way a mortgage loan is priced which can improve or worsen the way a mortgage price and cost is delivered to a borrower. To secure an investment mortgage there is a pricing adjustment of 1.75% of the loan amount. This percentage can be financed and built into the interest rate the borrower locks at or they can choose to pay a portion of this percentage in the form of discount points at the close of escrow.

The majority of the time people finance this into the loan amount, but it can be done either way. In most cases interest rates on investment properties are .25% to as high as .5% higher in interest rate compared to a primary residence or a second home transaction.

Successfully closing escrow on an investment mortgage can lead to additional income or higher returns on your money. In most cases, the math is there. Feel free to give us a contact to discuss whether not make sense.

Find An Investment Mortgage with the most competitive interest rates today.

 

 

 

 

 

 

 

 

 

 

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RELATED MORTGAGE ADVICE FROM SCOTT SHELDON

When buying a home, it’s natural to want the lowest mortgage rate possible. But sometimes, chasing a slightly better rate from another lender—especially after your offer has already been accepted—can backfire in a big way. Let’s walk through a real-world scenario. You’ve got an offer accepted on a house. You’re working with a lender who has you approved, documents in underwriting, and a 21-day close of escrow in place. Everything is moving forward. Then you hear from another lender offering a rate that’s 0.25% lower, with slightly better closing costs. It’s tempting. But before you make a jump, here’s what you need to consider. Switching Lenders Comes with Time Costs When you pivot to a new lender mid-contract, they’ll need to: Re-underwrite your entire loan, Order a new appraisal, Disclose and sign new loan documents, Submit the file for final loan approval, Schedule and fund closing—all over again. This doesn’t happen overnight. Even in ideal circumstances, the new lender is likely going to need at least 25–30 days to close. If you’re in a fast-moving or competitive market, this is a real problem. Most sellers won’t grant a contract extension just because you’re switching lenders. So, what happens next? A Contract Extension Can Jeopardize Your Deal Asking for a contract extension means the seller must agree to delay closing. But that delay introduces risk—especially if the seller has backup offers or simply wants certainty. They may not grant the extension. Or worse, they could cancel the deal outright and take another buyer’s offer. Even if the seller agrees to extend, your earnest money and negotiation power could take a hit. And for what? A slightly lower rate that might save you $50 to $75 a month? Mortgage Rates Aren’t as Far Apart as You Think Here’s the truth: all mortgage lenders get their money from the same place—the bond market. The pricing differences between lenders usually range from 0.125% to 0.25% in rate on any given day. If one lender seems to be offering dramatically better pricing, the first thing you should ask is: How? Head over to FreddieMac.com and check the average 30-year fixed rate posted weekly. This is one of the most reliable benchmarks for where rates truly stand in the market. If a lender is quoting you a rate that’s well below that average, ask for the details: Are they charging extra points? Is this a teaser rate with a prepayment penalty? Is it based on a different loan product or risky structure? Often, what sounds “too good to be true”… is. Consider the Bigger Picture Think long-term. If you’re financing $600,000, a 0.25% lower rate may reduce your payment by roughly $75/month. But what if you lose the house and have to start over? That monthly savings doesn’t mean much if you’re outbid on your dream home or lose your deposit. Also, remember: you’re not going to keep this rate forever. Today’s homebuyers typically refinance when rates drop by about 0.75% or more. So if rates fall within the next year or two, you’ll likely be refinancing anyway. Instead of paying extra points now or risking the entire deal for a minor monthly savings, it may be better to accept a slightly higher rate—knowing you’ll refinance when the time is right. The Real Risk Isn’t the Rate—It’s the Delay When shopping for a home loan, don’t just ask, “What’s your rate?” Ask: Can you close on time? Is this rate sustainable or based on hidden costs? Will switching lenders delay or jeopardize my contract? A home purchase contract is a binding agreement between you and the seller to perform within a set timeframe. If you can’t meet those dates because you're chasing a slightly better rate elsewhere, you may want to reconsider if now is the right time to buy. Final Thoughts Yes, interest rates matter. But execution matters more. Before making a switch mid-transaction, talk to your lender. Have an honest conversation about pricing, timelines, and strategy. You might find that staying the course, securing the house, and planning to refinance later offers a better path to financial security. Want to Know Your Options? Let’s compare rates and strategies the smart way—without risking your dream home. 👉 Click here to get a custom rate quote today.

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  1. […] you plan on purchasing income property-in most cases you can put 20% down and cash flow your investment after expenses. Consider the […]



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