• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Sonoma County Mortgages

Contact Us About Mortgage Financing

All financing provided by New American Funding

(707) 217-4000 | Prequalify Now

Search Sonoma County Mortgages

  • Home
  • Purchase
    • How Much Down Payment To Buy A Home?
    • How Much Income You Need To Buy A Home
    • How Much Should I Save For Buying A Home?
      • How Rates Affect Payment
    • No PMI Mortgages
    • FHA Loans
    • Sonoma County Disaster Loans
    • Jumbo Loans
  • Refinance
    • Mortgage Rates
    • Does It Make Sense To Refinance?
      • Get Your Refi Paperwork In Order
    • How To Pay Off Your Loan Faster
    • How To Remove PMI
    • How Lenders Price & Quote Loans
  • Loan Programs
  • Payment Calculator
    • Mortgage Affordability Calculator
  • Blog
  • Videos
  • About SCM
  • About Scott Sheldon

Primary Sidebar

Sonoma County Mortgages is a part of New American Funding

New American Funding - NMLS #6606

Get Your Latest Rate Quote Now!

Why Multiple Financed Properties Can Be Pricey

December 8, 2013 by Scott Sheldon

Share on Facebook Share on Twitter Share on Pinterest Share on LinkedIn Share on Email

Real estate investors get targeted the most by multiple finance property restrictions the majority of mortgage lenders enforce. To set the record straight a multiple financed property situation is when there is more than four  financed residential properties by anyone borrower/consumer.

Multiple finance properties include every other residential property with debt- beyond the borrower’s primary residence. Have under four properties? You won’t be considered as much of a risk as an individual who has more, but you’ll still pay the price for financing an income property.

What To Know If  You Have Multiple Mortgaged Houses

As with any mortgage loan these days, the lender is going to be most critical of  your personal income tax returns for the last two years. Particularly the Schedule E section of each tax return. The Schedule E identifies each rental property as well as other key factors, i.e. gross rents, repairs,  taxes, interest and depreciation-the items lenders look at when determining net income for qualifying. *Note lenders will use net income after expenses. 

Other Factors To Pay Attention To:

  • Find a lender who has the ability to allow for four or more financed properties-some lenders  don’t offer the program at all while others are limited to four, some can even go as high as ten
  • Be Informed: this loan will be pricier  due to risk based pricing. This  increased costs will come in the form of a higher interest rate or closing costs or combination of the two. Here’s why-because the loan is being sold to Fannie Mae or Freddie Mac, one of these two entities will end up bearing all of the risk of possible default-they charge for that risk.
  • Will be a document driven decision, be prepared for providing executed lease agreements for each  rental property
  • Credit Score-will need to be at least 700 with no foreclosures in the last seven years
  • More emphasis will be placed on debt ratio in the lending credit decision-with a maximum being at 45%
  • 20% equity or more will be required in the subject property when buying property-when refinancing property, can be 80% debt serviced unless eligible for Harp 2 Refinance

Four or more houses (including single families, condos, pud’s or 1-4 muti-unit – all apply here) each with mortgage debt will always create a higher risk loan with a lender originating the new loan (more liabilities). In a default situation, the investor is more likely to walk away from an investment house than they are on a primary residence house. The risk is augmented twofold for each indebted property.

The best way to reduce the costs associated multiple lent investment properties is to ask a lender if there is an additional cost premium for program eligibility. Some lenders charge more specifically for this reason, others do not. Each lender will charge a premium for the fact that property is non-owner occupied. The key is to work with a mortgage lender who has experience in qualifying investors who own multiple properties.

Start your loan scenario by getting a complementary no obligation mortgage rate quote with us now!

 

 

Related Mortgage Advice from Scott Sheldon

  • Income Property: Why These Mortgage Types Cost More

    Own an investment property? Thinking about buying a property for income producing purposes? It's going…

  • I have multiple financed properties? Can I still get a mortgage?

    Yes, while you can still get a mortgage, the overall process might take longer. Here's…

  • Lending LoopHole: FHA Loan For An Investment Property

    The FHA is aimed at promoting home ownership for consumers who do not " fit…

  • Rental Property
    Carrying A Rental Property May Hurt Your Mortgage Chances

    Do you own rental property? If yes, and you're looking to borrow money with a…

Filed Under: Invesment Properties/Second Homes, Loan Qualifying

Get Sonoma County Mortgages News and Updates in Your Inbox

Footer

SCM on Facebook

SonomaCountyMortgages.com

Connect on Facebook

SCM On Instagram

Follow Sonoma County Mortgages on Instagram

Follow on Instagram

SCM on Zillow

Zillow Reviews for Scott Sheldon, New American Funding

See Reviews on Zillow

Location & Contact

Sonoma County Mortgages and New American Funding are an Equal Opportunity Housing Lender

Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
2455 Bennett Valley Road C107
Santa Rosa, CA 95405
1-707-217-4000
View SCM Map | Email Us!

Map of Sonoma County Mortgages New American Financing Office

View Map on Google

Copyright 2010–2023 SonomaCountyMortgages.com · About Us · Sonoma County Loans · Privacy Policy · Terms Of Use · Legal · Site Map

NMLS Consumer Access © New American Funding. All rights Reserved. NMLS ID#6606.
Corporate Office 14511 Myford Road, Suite 100, Tustin, CA 92780. We at New American Funding take great pride in our customer service and make it our number one priority. We encourage you to contact us for complaint resolution or any post-closing questions you may have regarding the servicing of your loan. We strive to have your experience with New American Funding a stellar one. In the rare case that our service did not meet your expectations, please call our customer care hotline at 1-800- 450-2010, ext. 7100 or you may contact us by email customerservice@nafinc.com. Please leave a detailed message and we will follow up with you no later than the end of the next business day. If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-450-2010 Ext. 7100 for assistance.

State Licensing (Opens in New Window) | Privacy (Opens in New Window)
Terms of Use (Opens in New Window) | Electronic Consent Agreement (Opens in New Window)
Opens in new window Opens an external site Opens an external site in a new window