Maybe you’ve considered buying a piece of property and then renting it out – doing so can be a source of cash flow and an investment which could appreciate in value. However, getting a loan for a rental property can differ from getting a mortgage for an owner-occupied home.
An investor loan is designed to meet the specific needs of an investment property (or properties). These loans can enable borrowers to get higher loan limits than traditional mortgages. These loans are also not limited to a single property, but can be extended to multiple investment properties at once.
Investing in Real Estate
Real estate is a popular investment type for several reasons, including the ability to generate a passive income, possible tax benefits, and potential asset appreciation.1 In fact, of the over 19 million rental properties in the U.S., more than two-thirds are owned by individuals, rather than companies, partnerships or trusts.1
If you’re curious about acquiring a rental property, you may be able to secure a loan tailored to your needs via a non-qualified mortgage.
What is a Non-Qualified Mortgage (non-QM)?
A non-qualified mortgage exists outside of the requirements set by the Consumer Financial Protection Bureau. Because a non-QM falls outside of these stricter standards, they can flex to fit the needs of less traditional borrowers. Non-QMs can include:
- Higher loan limits
- Less stringent qualifying criteria
- Alternative income documentation
The Newrez Solution: Presenting SmartVest
Newrez offers a series of non-QM loans, called our Smart Series. SmartVest is our product designed especially for real estate investors. Qualified individuals can use SmartVest to:
- Buy another property and expand their investment portfolio
- Unlock equity in their current investment property to access cash
- Use market rent (cash flow) from the subject property to qualify for a loan
Here’s an illustrative example:
A borrower wants to buy another property to grow their investment portfolio. The property in question is reviewed and verified to generate enough rental income to cover the mortgage payment. Additionally, because the borrower has saved money to put down and has a 670 credit score, they meet the qualifying criteria for a SmartVest loan. With this loan, the borrower bought a new rental property and can pay the mortgage debt through the rental income it generates.
Top Reasons to Choose SmartVest:
With SmartVest, you can benefit from:
- Less required documentation
- Easier qualifying criteria
At Newrez, we want to help you reach your financial and home ownership goals. If you’re interested in learning more about a SmartVest loan, reach out to one of our mortgage experts today.
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