Absolute Mortgage offers a specialized mortgage product tailored for individuals looking to invest in rental properties. Whether you are purchasing your first rental property or expanding an existing portfolio, this product is designed to simplify the process of financing investment properties. With competitive terms and flexible options, it provides the tools necessary to start or grow your investment journey.
This solution is ideal for those seeking to finance a rental property purchase, regardless of experience level. For first-time buyers, it opens doors to entering the rental market. Seasoned investors can use this product to add new properties to their portfolios with ease. By requiring a minimum 20% down payment, the product ensures that buyers have a strong equity position from the outset.
The maximum Loan-to-Value (LTV) for this product is 80%, making it a reliable option for those ready to invest in rental real estate. Down payments can be sourced from personal savings, gifted funds, or even equity borrowed from another property you own. It is essential that the funds are verifiable and have been in your account for at least 90 days, aligning with lending standards to ensure transparency and financial readiness.
Lender selection is influenced by the number of properties in your portfolio, as different institutions have varying guidelines and preferences. This ensures that each investor is matched with the best possible terms for their specific needs. By partnering with Absolute Mortgage, buyers benefit from expert advice and tailored solutions that make rental property investments more accessible and straightforward.
Most lenders will require a Debt Service Coverage Ratio (DSCR) of at least 1.10 for rental properties. This ratio measures the property’s ability to cover its mortgage payments based on rental income. For example, if your rental income is $2,000 per month, and you incur $500 in expenses (e.g., property management fees, maintenance), and you have a $1,200 monthly mortgage payment, your DSCR would be 1.25. This is calculated as follows:
DSCR = (Rental income – Expenses) / Mortgage payment
DSCR = ($2,000 – $500) / $1,200 = 1.25
A DSCR above 1.0 indicates that the property generates enough income to cover the mortgage payments, which is a key factor in qualifying for a rental refinance.