Mortgaging A Multi-Unit Home

Different Regulations Apply When Buying A Duplex, Triplex, Or Apartment Buildings

You have been thinking about how to make your mortgage payments more manageable, and have come up with a bright idea. If you buy a multi-unit home, you could rent out the additional units to help you bring in some extra income to put towards your mortgage, right? This will work in theory, but you should be aware that the lending requirements for apartment buildings and multi-family homes differ from those of single-family homes.

For example, if you choose to use a conventional mortgage to buy your multi-family building, you will need to put down a significant down payment. If you are buying a duplex, you can expect to be required to put down 20 percent. If you are going larger scale (for example, buying a triplex or apartment building), your lender will require a down payment of between 25 and 30 percent. This is because the property you are purchasing is more of an investment, and is consequently a bigger risk for your lender.

Fortunately, there are a couple of methods you can use to make this idea more affordable in reality. First, you can use a loan from the Federal Housing Administration. Even when buying a multi-unit home, you will only be required to put down 3.5 percent. Secondly, if you can get your tenants to sign their leases before you buy the property, you will be able to count their rent towards your mortgage payments, making it easier to secure the necessary home loan.

Because the lending requirements for apartments and multi-family homes differ from those of single-family homes, it is important to work with a lending expert with a background in these particular regulations. To get the professionals on your side, contact Avis Lending. Our Lahaina, Hawaii and Irvine, California based teams have years of experience helping people get the loan they need for their duplex, triplex, apartment building and more.

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