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Posted by Darrin Seppinni
July 14, 2021

Why No Income Doc Rental Loans Are Booming

Real estate investors can now simply qualify with a streamlined, Low-Interest 30-year fixed rental property loans.

Here’s how to get one:
Traditional mortgage loans can be a big hassle for real estate investors, requiring countless types of documentation, much of which is hard to come by (especially if you have multiple income-earning properties in your portfolio.)

They also require tax returns. And for many investors? Those returns don’t reflect the true income they’re earning. Making it harder to qualify.

Fortunately, there’s now another option in the mix: The no-income doc rental loan.

These innovative products give investors an affordable and hassle-free way to get financing-whether it’s to tap equity on an existing property or fund an entirely new investment.

Benefits of No-Income Doc Rental Loans

No-income doc rental loans come with serious benefits for investors. Not only are they less of a hassle, but there also long- term advantages as well.

Here are some of the benefits investors enjoy with a no-income doc rental property loan
  • Rates starting in the low 4% range
  • You get a low, fixed interest rate: This is ideal if you plan on holding your investment property for the long haul, as it insures healthy cash flow
  • Tax returns and other financial statements aren’t necessary: Simply qualify with credit score and rental income cash flow from subject property only.
  • The title is flexible: Your property can be purchased or refinanced under an LLC, corporation, or your individual name.
  • Qualify with and without rental income
  • Buy or refinance up to 80% of the property value:
  • Property Types: single family residence, condominiums, 2-4 units
  • $250,000 to $5 Million loan amounts

Simple Qualifying

Your interest rate is based on your credit score, as well as your down payment size and loan-to-value ratio. Borrowers with the highest credit scores and lowest loan-to-value ratios will qualify for the lowest rates.

Credit Scores

If buying or refinancing with one borrower, the middle score of all 3 bureaus is used. With multiple borrowers, the lowest middle score of all borrowers is used.

Rental Income Qualifying

Purchase - use market rent from appraisal rent survey (No tenant or lease required)
Refinance – Market rents from appraisal, or 3 months rents received (Tenant and lease required)

Debt service coverage ratio (DSCR)

The debt service coverage ratio is the ratio of income derived from a property (rental income) to debt servicing (principal and interest payments, property taxes, insurance), referred as PITI and HOA if applicable.
Qualifying for the best interest rates requires rental income to sufficiently cover the new monthly PITI. In other words, you want your DSCR to be 1.1 or better.

For example: Rents/PITI + HOA payment = DSCR
Rents $5,000/PITI $4,700 = 1.6
Positive rental income qualifies for the best interest rates

Liquid Assets Required

Down payment, closing costs, and 6 months reserves of the monthly PITI payment must be sourced or seasoned for 30 days in the bank.

Loan Terms

30 years fixed
40 years fixed – with 10-year interest only (I/O) period. After the 10-year interest only period, the loan automatically turns into a fully amortized loan for the remaining 30 years. (Minimum 700 credit score)

Apply for your no-income doc Rental loan today

Need to refinance or buy that next investment property? A no income doc rental property loan may be your best bet. Get in touch today for a fast 48 hour pre-approval.

GET PRE-APPROVED NOW

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Hard Money and Private Money Mortgage Loans for Real Estate Investors

Questions?

Click the live chat window on our site or call (888) 677-2526.  Our team is ready to assist you!

About HomeLife Mortgage

For more than 25 years, HomeLife Mortgage has built a strong reputation in California and Florida as a leading mortgage broker, servicing the needs of borrowers who have been unable to obtain conventional financing.  HomeLife Mortgage is at the forefront of non-bank lending offering the next generation of mortgages including Jumbo Loans, Real Estate Investor Loans, and Bank Statement Loans.

 

Darrin Seppinni

Darrin Seppinni

Darrin Seppinni is a highly trained and experienced veteran of the mortgage lending industry. For more than 35 years, Darrin has leveraged his specialized knowledge and expertise to secure real estate financing for thousands of borrowers using leading edge mortgage loan products. He is proud to be at the forefront of alternative lending programs specializing in: Jumbo and Super Jumbo loans, self-employed bank statement loans (no tax returns needed to qualify); and investment property rental loans (stated income). Darrin is passionate about educating borrowers with unique needs on the benefits of non-traditional loan programs. Darrin is the author of, The Mortgage Originator Success Kit, published by Mc Graw Hill. Contact us to learn more.