How to Plan for Financing an Income Property
November 1, 2018 | Posted by: Mortgages By Marbelle
How to Plan for Financing an Income Property
So, you want to own an income property. It’s a great source of additional income as shelter is among the top items on people’s list of needs. Over time, the value of land will increase which means potentially more money in your pocket. But before you start looking into properties, there are some considerations to keep in mind when applying for investment property financing.
Have a plan in mind
It’s a good idea to have a plan prior to speaking with a mortgage broker. With this plan, you might start to consider your options in terms of which areas people want to live, how you plan to maintain the property, how many properties you intend to acquire, and how long you intend to obtain this responsibility. Identifying these factors will make for a productive first conversation with your mortgage broker. You may not know all the answers right away, but that’s where your mortgage broker can fill in those details. For example, if you need help finding a good home inspector then you can be sure to receive recommendations.
Proof of your ability to finance the property
You’ll need to provide four pieces of proof: your credit history, proof of income, proof of a down payment, and emergency funds or closing costs. When these pieces are reflected positively, then your chances of being qualified for financing will be much greater. In reference to your down payment, you will need to provide proof that the money that you plan to spend has been in your account for at least 3 months.
New Property Details
You will need to provide your mortgage broker with the following information: the MLS listing, Agreement of Purchase and Sale, and applicable waivers. To show that you’re taking the process seriously, you will also need to provide either a lease for the new property, or a letter from an appraiser which confirms the market rental price of your property. All this affirms the importance of having a plan in mind.
Taking possession of an income property is an exciting endeavour but it’s also responsibility that should never be taken lightly. There are a number of things that can go wrong when the right measures are not followed. If you have questions about how Marbelle Financing can help, then feel free to give them a call today!
