That’s right! How would you like to have your tenants pay your monthly mortgage payments? This would mean; not a single penny from your pocket would be going towards paying off the mortgage. As you may know now, we are talking about a rental property. Here are some tips you should follow before approaching the official purchase of a rental property.

1. Look for a good/reputable real estate agent.
2. Look for a good/reputable mortgage broker.
3. Look for a good/reputable mortgage insurance broker.
4. Try to find a property that would not be vacant most of the time.
5. Try to find a property without major work that has to be done.
6. Make sure the property was not built too long ago (inspection will take care of these aspects).

Usually, when you purchase a four unit property, it will be classified as a residential property. If its is over, it will be put under as a commercial property. The issue with a commercial property is that it requires a higher ratio of an initial mortgage down payment compared to a residential property. This is where your mortgage broker/advisor would help, they will be able to provide information which will outline exactly what is what and the cost as well. You also would not have to worry about having a large sum of money saved up, to qualify for a large property. The reason is that; the rental income would help qualify for the loan. The lender will do some calculations to get an approximate value for the rental income and take that into consideration in the process of giving out the loan. You can read more about this in one of our articles here; “Would Rental Income Help Qualify For A Loan?”. This type of property is a great revenue puller, get in this market while you can! You would also need some insurance for your property other than the mortgage insurance. This insurance would cover anything caused to your building by tenants, IE: a fire.

Useful Links & Tools
Information On Private Mortgage Insurance (PMI)
How To Cancel Private Mortgage Insurance
Would Rental Income Help Qualify For A Loan
Save Time & Money From Your Mortgage
Mortgage Tools

First time home buyers always have certain fears deep inside them. Some are scared to reveal them, worrying about whether it would make them look bad. Some others will take the chance and ask all questions. A very important step which you should take is to clear all doubts you might have, you don’t want to pay the price later for a simple question you could have asked in the beginning.

Most first time home buyers don’t know what they exactly need for the beginning processes of buying a home. Once in a while the case might lead up like this; the mortgage broker finds out what the borrower knows about the industry. If he/she thinks the borrower is totally new to this, they might try to skim out as much money as possible from the borrower. You should always be smart, act smart and talk smart. They would say, it cost this much for this and that much for that, but you should find out what every penny of your money is going towards. If something seems to fishy then it most probably is. You should read our last article “Is Your Lender Reliable? Find Out!“, to get information on how to tell if your mortgage broker/advisor is reputable.

A real mortgage broker should be able to provide information on everything regarding the purchase of your home. They most likely will not provide services like. your house inspection, but they will truly provide you with contact information to a professional house inspection company. Your mortgage broker would require you to provide legit information on income and debt. They would use this information to calculate how much money you can spend on things such as legal fee’s, house inspection fee’s and other application fee’s. Make sure you look around for a mortgage broker who would be helpful and does work promptly. Don’t look at the price tag, look at the quality of service offered. This is a major change in your life, you don’t want type of trouble. If you see your mortgage broker is not what you want, you should speak out in the beginning and not wait until the climax of the process.

Useful Links For You
BBB (Better Business Bureau)
Mortgage Tools

It is known that many people do not take the time to make sure everything in their major purchase is perfect and well established. This is a major mistake which should be decreased, because this can result in the loss in a ton of money. Every borrower should take the time to research about their lender before any professional interactions. If no information can be found about a specific lender, it wise to drop that lender from your potential list. This is why it is important to ask yourself several questions to see whether the lender is reliable and trustworthy. You should ask friends, colleagues and relatives who they used as their mortgage lender, and get a lot of information, this way you can compare what is out there. Listed and described below are a list of questions you should think about before any contract agreements. 
 
1. How Long Has This Financial Institution Been In Business? 
 
You should find out how long your lender (mortgage loan lender) has been in business doing what you are looking for, especially is it is a bad credit mortgage company (very important). It is best to avoid companies who have been in business for only a recent period of time because in these cases, there is a higher risk for fraud or bankruptcy of any sort. In the case of a bad credit mortgage loan lender, it may be that the company is just trying to cash out on some innocent customers. Another option is that the company might have changed its name due to some legal issues which may have affected its business model. You should check with BBB (Better Business Bureau) to see how long an institution has been in business for. 
 
2. Your Loan Should Be Personalized 
 
If your mortgage lender just gives you option off the top of their head and tells you, this is your plan, you should avoid such a company. A real professional mortgage broker/advisor should examine your case and look at your financial status and provide a specific plan that best fits you. They should explain all the information clearly and provide it to your in writing which you would keep as a hard copy. If anything goes wrong, you have proof of the agreed information. 
 
3. Lies Do Not Exist In Business 
 
When filling out forms for your mortgage application, your lender should warn you to provide legit information. If the lender suggest to lie about something in the application, you should definitely avoid this institution. Some people think, the lender is being friendly. This is not always the case, this can lead to dangerous situations. Most of the time, bad credit mortgage lenders would suggest to boast on your income level, so you will be granted a loan. If for any reason, you feel that the appraisal seems higher you should consult with someone at the same time. 
 
4. Do You Have A Professional Working For You? 
 
From the beginning to the end of the closing, you should have someone working with you & working for you. They should be someone who is reachable for information, when you need it. You do not want someone who, you spend have the time trying to contact. It’s best to choose a financial lender who will provide a professional who will work with you till the end of the deal agreement.

The way the economy is going now, people might be having a hard time putting money upfront for a mortgage down payment. They also can’t be financially ready for a zero down payment mortgage. There is a solution which offer some assistance to those who are tight financially, which would help them pay for their mortgage down payment. Some state organizations and agencies operate several bond programs which would help give some funds to home buyers. This money is basically from the Government, and they know it can be hard to buy that first home. However, these agencies will be looking at your current income level, but you would be shocked to hear, they accept a lot of people into the program. Once the mortgage down payment has been approved, you may get the chance of getting a lower interest rate. You should know, there is more work involved. This is always the case, the more easier one thing gets, the harder the other one. Paper work would be increased and you may have to attend some courses to learn some tips/knowledge. The best solution for you to do is, get in contact with a mortgage advisor or financial advisor who is knowledgeable with this issue.

Some Tools You May Use
Mortgage Tools
Mortgage Down Payment