What to know about non-owner occupied renovation loans
Non-owner occupied loans are used to renovate income properties. They are designed for people that own multiple properties. The process for obtaining these loans is similar to that for obtaining traditional mortgages. You do not have to be a landlord to obtain one. If you apply for a non-owner occupied loan, you will find that they are nearly difficult to obtain. We at MortgageDepot specialize in non-owner occupied renovation loans.
The criteria for obtaining non-owner occupied renovation loans are stricter than that for traditional mortgages. The reason is that income property come with risks: renters, lots of repairs, and the loss of rental income. Non-owner occupied loans require down payments of at least 20%. They also require you to have a credit score of at least 720. Your loan to value ratio must not exceed 80%. The money you borrow must be used to renovate one unit at a time. Improvements must be permanently affixed and add value to the property. If you are new to being a landlord, then your primary and potential rental income will be taken into consideration. There are benefits to using these loans.
The biggest benefit to using non-owner occupied renovation loans is that you receive credits that are up to 75% of your rental income. Another benefit to using these loans is that you pay lower interest rates than if you refinance with traditional mortgages. The third benefit is that there is no minimum amount of money you can borrow for repairs. And, you are allowed to own up to four properties. When you are ready to apply for a loan, we at MortgageDepot will make the application process as simple as possible so you will have the right loan for your renovation needs.