Qualifying for a mortgage in Pennsylvania is not a black-and-white endeavor. There is a seemingly unlimited number of special situations that borrowers could encounter, especially when it comes to investment properties. At MortgageDepot, we know that busy investors can’t keep track of these nuances. That’s why we manage the details for you!
If you want to be a player in the investment property game, there are a few things you need to know. Lesson #1: Freddie Mac and Fannie Mae have different approaches in their use of rental income in primary conversions.
If you need a second mortgage because you want to turn your primary residence into an investment property, Freddie Mac and Fannie Mae have different ways of using rental income to qualify. Let’s break it down like this:
If your MortgageDepot loan officer presents a Freddie Mac loan as an option, you’ll need to have a minimum of a 12-month history of documented investment property management experience to use excess rental income to qualify. Excess rental income refers to income after considering principal, interest, taxes and insurance (PITI).
If your MortgageDepot loan officer suggests a Fannie Mae loan, you will only need to provide a one-year history of rental income receipt or property management experience to use excess rental income to qualify. You don’t need to have both to be eligible for the mortgage.
Providing adequate documentation to qualify for a Freddie Mac or Fannie Mae loan can be tricky, but MortgageDepot will guide you! If you are converting your current primary residence into an investment property, you’ll need to have your last Schedule E tax form to use excess rental income to qualify for your next mortgage. Your MortgageDepot loan officer will tell you if you need to come prepared with additional forms of documentation.
If you want to use real estate opportunities to reach your financial goals, don’t embark on your journey alone! Partner with MortgageDepot to learn the ins and outs of: