In general, you'll need to move into the property within 60 days of closing. Additionally, you'll need to live in the property for at least 12 months to qualify as an owner-occupant with most lenders. In contrast, you could obtain financing as an absentee owner.
Can you use projected rental income for conventional loan?
As part of the qualifying process, your lender will calculate your future rental income, adjusting for maintenance, vacancies, or other issues that may arise. This number—75% of the rent you expect to receive each month—is then used to offset your monthly mortgage costs for your previous home and its mortgage.
What is the down payment on a conventional home loan?
Home buyers can make a conventional down payment anywhere between 3% and 20% (or more) depending on the lender, the loan program, and the price and location of the home. Keep in mind that when you put down less than 20% on a conventional loan, you are required to pay private mortgage insurance (PMI).
Should you put 20% down on an investment property?
Make a sizable down payment
Since mortgage insurance won't cover investment properties, you'll generally need to put at least 20 percent down to secure traditional financing from a lender.
What is the 90 day rule on conventional loans?
This rule states that a person selling a flipped home must own the home for more than 90 days before home buyers can purchase the property. Sellers who plan on flipping a house generally buy a distressed property, give them some TLC, and then sell them for a profit.
How do I turn my primary residence into a rental property?
- Check with your lender to see if you can use your mortgage for a rental property.
- Add landlord liability insurance.
- Apply for licenses and permits.
- Prep the property.
- Get property management software.