Unlike the mortgage on your home, financing an investment property can be much more complex. The number of units in the property and whether or not you are going to live in one of those units will determine the type of financing you can expect.
Another area where most mortgage companies can make it difficult for you is if you own more than 4 properties. Some lenders may even refuse your request because in their policy manual, you are too risky! Because of the complexity and you seewasting your time, we strongly suggest you call us to get the information. Call today at 613-563-3447.
When shopping for an investment property you will need to determine the number of units in the building. Most of the major lenders are only interested in financing properties in the 1-4 unit range. Five or more units and the lenders deem the property to fall under their commercial guidelines. Once that happens, it can become even more complex. Some lenders will not mortgage 5 or more units and if they put it under their commercial department it can be even tougher to be approved. And the rates are often higher, see Commercial Property Mortgages or call 613-563-3447 now to get the answers.
In a multi-unit property, you will need to decide if you are going to live in one of the units. If you do live in one of the units the property would be considered owner-occupied. If all the units are to be rented out the property would be deemed non-owner occupied. The main difference between the two is how much of a down payment you have to make.
Owner-Occupied Rental
If you are purchasing a 1-2 unit investment property & live in one of the units you can be approved for a maximum mortgage of 95% of the purchase price.
If you are purchasing a 3-4 unit property you can be approved for a maximum mortgage of 90% of the purchase price.
Non-Owner Occupied Rental
It will not matter if you purchase 1-2 units or a 3-4 units because once the investment property is non-owner occupied you will need a 20% down payment. The maximum first mortgage is 80% of the purchase price. If you want to borrow more money you will need to consider a second mortgage. See Second Mortgages/Private. Best thing to do for rental properties is to call us now to discuss your needs. Call now at 613-563-3447
Rental/Investment Property Mortgage Rates
Rental rates vary with each lender but after the new mortgage rules higher rates usually apply. Keeping in mind not all lenders have the same criteria for investment property mortgages. Some will want to bump your rate or add an insurance premium to your mortgage. Again best to call us since we are dealing with some 30 different mortgage companies. Call now at 613-563-3447
