Real estate continues to be one of the best ways to grow wealth and create financial stability. And that's true for both single property owners and multi-property owners.
In fact, that's one reason why the government insures certain home loans: they understand that owning property brings financial freedom for all who reside in the US.
One of the most popular government-backed loans is an FHA loan, and it's specifically geared for lower-income or lower credit individuals. However, homeowners with FHA loans are likely to move up the income bracket and find themselves now able to get an investment property.
If this sounds like you, congratulations! You are living the American dream!
Since an FHA loan cannot be used to buy an investment property, a conventional is typically the answer for buying a second property. But there may be a caveat: can you get a conventional loan for an investment property if you have an FHA loan for your home?
**Want to skip ahead? Contact us today and know for sure which loan program is right for you and investing in your future.
Given that FHA loans are typically for borrowers who may be less financially stable, some lenders may be hesitant to greenlight financing a second property.
Understanding this, know that the lender will look at your finances closely to ensure that you will be able to maintain both loans and not overtax your finances. Your income, length at your job, and any new debt will be analyzed even further than it probably was the first time around.
Even if the second property is for commercial purposes, you must still prove that you can support the second mortgage without the additional income it may bring.
Your eligibility is largely based on your debt-to-income (DTI) ratio, and most lenders will reject a DTI ratio above 43%. If your DTI is higher than this, then the first step is to lower your DTI before applying for a second loan. This is most effectively achieved by paying down debt.
Your credit score is also factor in qualifying for a second loan --even more so than when you qualified for an FHA loan! While FHA loans allow for less than perfect credit, a conventional loan for a second home has more strict requirements. A 720 or higher credit score should be your benchmark to qualify for a second loan.
Are you thinking about buying an investment property? Right now is a great time! Rates are low, and both commercial and residential properties are up for grabs!
Contact us today to see how much you qualify for and start building your wealth in real estate.
We've been helping customers afford the home of their dreams for many years and we love what we do.
Real Estate Broker – CA Department of Real Estate
License #01269597, NMLS #238166
5772 Bolsa Ave., Suite 250
Huntington Beach, California 92649
Phone: (714) 901-2301
Stratis Financial Corporation strives to ensure that its services are accessible to people with disabilities. Stratis Financial Corporation has invested a significant amount of resources to help ensure that its website is made easier to use and more accessible for people with disabilities, with the strong belief that every person has the right to live with dignity, equality, comfort and independence.
Stratis Financial Corporation makes available the UserWay Website Accessibility Widget that is powered by a dedicated accessibility server. The software allows stratisfinancial.com to improve its compliance with the Web Content Accessibility Guidelines (WCAG 2.1).
The Stratis Financial Corporation accessibility menu can be enabled by clicking the accessibility menu icon that appears on the corner on the page. After triggering the accessibility menu, please wait a moment for the accessibility menu to load in its entirety.
Stratis Financial Corporation continues its efforts to constantly improve the accessibility of its site and services in the belief that it is our collective moral obligation to allow seamless, accessible and unhindered use also for those of us with disabilities.
Despite our efforts to make all pages and content on Stratis Financial Corporation website fully accessible, some content may not have yet been fully adapted to the strictest accessibility standards. This may be a result of not having found or identified the most appropriate technological solution.
If you are experiencing difficulty with any content on Stratis Financial Corporation website or require assistance with any part of our site, please contact us during normal business hours as detailed below and we will be happy to assist.
If you wish to report an accessibility issue, have any questions or need assistance, please contact us by sending an email to: email@example.com