I’m seeing some challenges lately in the residential mortgage market.
Buying a rental and putting a mortgage on it can be very difficult in today’s market, especially with the main stream mono line lenders and banks. I’ve recently had a client with 40% down needing a mortgage on a rental property. I never knew it would be so difficult! Most lenders have changed their policies on how they treat rental income. Most also still charge the insurance premium from 65-80% loan to value meaning the client would need 35% down to avoid the premium. It’s not the end of the world as the premium is a tax write off.
In the end I had to go to a credit union. Credit unions are busy these days as they don’t follow the same rules the banks do and with all the recent changes more and more people are credit union clients. Only problem here is that the CU’s get this and their rates are typically higher than the rest.
Having rental properties used to be alright and of course still is. However, again with the rule changes in the last while it has become more and more difficult to find someone buying a principal residence (with other properties) a mortgage. The options of lenders are dwindling down and even with good applications (as I’m going through right now) these people are still being turned down.
I guess what I’m saying is don’t be surprised if the mortgage broker asks for subject extensions with these types of clients. Typically a week and we were done. Now that we have to go through, potentially, a few lenders (assuming the client is working with a broker and in this day and age should be as we have multiple options) things can take longer.
Thank you so much!