Informed Real Estate Investing: How to Make Your Next Move
Before you can consider whether or not you’re ready (or want) to pursue new real estate investment opportunities, there are some minimum qualifications you need to meet. We will quickly walk you through those before highlighting your next steps.
Investment Property Loan Qualifications
When considering buying a new real estate investment, the first question should always be: Do you qualify? Some key investment property loan qualifications include:
• Minimum 25% Down Payment: Many investment lenders have a max LTV of 80%, and that is for the highest credit score tiers.
• Minimum 680 Credit Score: Most investment lenders have a minimum credit score of 680 with better rates and terms for higher credit.
Lenders use credit score, as one of many factors, to determine a borrower’s ability to pay back a loan. LTV indicates to lenders how much skin in the game a borrower has and also serves as a safety cushion. If your credit score is not up-to-par, check out our tips on improving credit. For those investors without enough cash on-hand to invest, learn more about tapping into your existing equity to build wealth.
Investors with strong credit and reserves, continue down our decision tree for more guidance on this being the right decision for you. While this decision tree is here to guide you, we always recommend consulting your counsel for any new investments.