Buying Investment property at 15 percent down using conventional

[John Mason]

Buying Investment property at 15 percent down using conventional.

What would lenders look for as documentation? Tax returns and w2 paystubs?

For a  300 K in Tampa Area what would be the down payment?

When we buy primary we do not pay mortgage for 2 months, is that applicable to investment property?

Thanks

[Jay Hurst]

Quote from @John Mason:

Buying Investment property at 15 percent down using conventional.

What would lenders look for as documentation? Tax returns and w2 paystubs?

For a  300 K in Tampa Area what would be the down payment?

When we buy primary we do not pay mortgage for 2 months, is that applicable to investment property?

Thanks

 Conventional loans will underwrite your entire income with your paystubs, W-2, and tax returns (if you have any self employment income, and own other real estate). It will also use 75% of the rental income of the subject property as long as you have a current housing expense. Personal credit and assets will also be used and the amount of assets you need would depend on how many properties you currently have financed. (this is called reserves) 

On a 300k price 15% is 45,000 but you would need closing costs and the required reserves for your particular situation as mentioned above.  And yes, the first payment date is treated the same. Although, the industry kind of pulls a fast one on that. You are not "skipping" anything. For example, lets say you close on May 7th. You first payment would no be due until July 1st. (and with no late fee until July 16th) The reason for this is that mortgages are paid in arrears (except for the month closing which I will explain below). That simply means your July 1st payment is paying for the principal/interest for June.  So, you are not skipping anything.

Further, using the same May 7th closing date you would see on your closing disclosure under pre-paid interest you are paying interest from the day of closing until May 30th.  That is the pre-paid interest for May. Then then you start paying arrears with the July payment. So, you absolutely pay interest everyday you have the loan.  Yes, from a cash flow perspective you do delay which can be helpful but I have found folks truly think they do not have make a payment which is not true.