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Getting Financing when all you do is Real Estate

  • Fri, March 16, 2018 7:46 AM
    Reply # 5981914 on 5981275
    Victor Menasce (Administrator)

    Brian,

    You're trying to apply a commercial mind-set to a world of residential underwriting. In the world of residential lending, the assumption is that the primary path to repayment of the loan is the borrower's T4 income. That's true for the majority of the population. Single family residences are owned and occupied by the same person in that world. Those who own a few extra properties are considered amateur investors and are treated as such. Their hands are tied and they're prevented from owning too much real estate because they're assumed to be amateurs.

    In the world of commercial lending, the performance of the asset is the primary factor, and not the T4 income of the borrower. There is no limit to your ability to borrow in the world of commercial as long as the underwriting rules are met. If you own 1,000 units your employment income won't fix a problem with that asset. So it doesn't even enter the equation. In the world of commercial, it's all about management and the asset.  

    What you're trying to do is a forced fit. The hardest thing to do is play small. 

    Victor.


  • Fri, March 16, 2018 6:58 AM
    Reply # 5981856 on 5981275
    Deleted user

    Good morning Brian,


    Yes, the lenders (trust me, not your mortgage broker), do often only accept a portion of your rental income when looking for a residential mortgage. There are however some lenders we have that do not put any limit on the number of doors you have, as well as those who will include 80-100% of the rental income for any property you already own and have rented.  I’m happy to help.

    -Julie Sheremeto

    613-266-6886

    Jsheremeto@themortgageadvisors.com



  • Thu, March 15, 2018 10:09 PM
    Message # 5981275
    Deleted user
    I think my days of getting a mortgage at the bank is likely over. With 100% of my income from real estate (mostly rental income), most banks discount my rents by 50% and then look at my current mortgages and show me to the door rather quickly even though I've been doing this for nearly 20yrs. In recent years, I've simply worked around this challenge by working with investors and having them carry the mortgage but I'm interested in buying some residential RE without the help of an investor. Anyone know a really good mortgage broker who recognizes that rental income shouldn't be considered a sin?


    Brian

     


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