Thread: Mortgage on a rental property

Hello

I am a first time investor and I would like
to ask a question regarding a confusing thing I have in my mind.

If I buy a rental property in
and, later on I decide to buy my own home,

how that mortgage on the rental property will affect the
one on my own home? Is the lender going to apply a higher rate of interest?

DO you suggest to buy my own place first then invest in other properties?

Thank you for your time

Robert

You will have a hell of a time convincing a lender that your first home purchase will be an investment and not a primary home. That said, investment properties carry far worse pricing and qualifying restrictions.

There is good news for all home loan consumers in India. Given the boom in real estate in India, housing/home loan has become the most popular form of loan. Various banks have started working in the direction to ease the burden on the home loan consumers. Two public sector banks, Allahabad Bank and Central Bank of India, have decided to reduce interest rates on housing loans by 25 basis points. The above reduction will be effective from April one, on all fresh sanctions. Various other banks have started thinking on this line to boost the demand in housing loan sector, particularly among small and medium category borrowers. Considering the current inflation in property rates this is only a small concession.For more view- realtydigest.blogspot.com

Originally Posted by gigant

Hello

I am a first time investor and I would like
to ask a question regarding a confusing thing I have in my mind.

If I buy a rental property in
and, later on I decide to buy my own home,

how that mortgage on the rental property will affect the
one on my own home? Is the lender going to apply a higher rate of interest?

DO you suggest to buy my own place first then invest in other properties?

Thank you for your time

Robert

My first purchase was made as an investment. I purchased it using a owner occupied loan. Lived in it for six months and then rented it out. I then purchased another home using a owner occupied loan and repeated the above procedure. Each time you make a purchase it will reduce your buying power. This is because most lenders will only let you claim 75% of the rents you recieve as income. And of this 75% they only allow at max 43% of it to be used to qualify for new loans. So, I would say that the safe thing for you to do is buy a modest house for yourself that would work out as a good rental. Then live in it for a period of time making your payments on time. Then look into buying more property and rent out the home you have been living in. Good luck if you have any further questions PM me.