Investing in a rental property can be a costly expenditure upfront. One of the main reasons for this is how much it costs to buy property in Atlanta.
Right now, the average listing price for homes in Atlanta is over $357,000.
If you are considering buying one of these properties, you are likely going to need friendly mortgage rates. How do you secure a good mortgage rate? This guide breaks it down.
Check Your Credit Score
One of the first things that you should do is check your credit score. Even on a normal mortgage, this could play a big part in what kind of rate you will get for it. However, when it comes to investment properties, the credit score requirements typically go up.
That is because, in the eyes of a lender, this is a symbol that shows them how reliable you are with paying your debts. Do you make your payments on time? Do you have any other outstanding debt?
Your credit score helps show lenders what kind of issues they could be running into by working with you. Or, it could show them that you are typically very reliable to work with.
The average credit score in America is 714. So, if your credit score is not close to that, you may want to work on that before trying to get a new mortgage rate.
Larger Down Payments
Another thing that you can do is try to put a larger down payment, if possible when you are buying a new property. The reason for this is that it will show lenders that you are more serious about the property.
On top of this, it means that you will end up asking for a lower total mortgage loan. As a result, it will decrease the risk of the lender if you put an extra $20,000 down for a home.
Finding a Co-Signor
Finally, you may want to find a co-signor that you can rely on and trust. Sometimes, this can mean finding an angel investor or a partner to share the load of taking on a mortgage loan.
In these situations, it can also mean the partner can contribute more towards your down payment. That can also increase your chances of getting a better mortgage rate.
Even if it is a family member, if they have reliable credit history and enough assets, it can help your case when it comes to mortgage rates.
Get Better Mortgage Rates
These are a few things that you can do to try to secure better mortgage rates for investment properties. The first thing you should do is make sure that your credit score is where you want it to be before applying for a loan.
If that is not enough, you should try to come up with a larger down payment or find a co-signor to help with both issues above.
Do you need help with your rental business? Message us here with your questions.