I need help finding a 40yr amort. on a rental property

[Sherwoodparkcondos]

Hi,
Anyone know if its possible to get a 40yr amortization on a rental, without having to pay extra fees or a high interest rate.
I`d like to put 25% down, on a 3yr fixed, with an interest rate no higher than 5.9%, with a 40yr amortization.
The broker I`m dealing with can`t find me one. She says some of the lenders want me to be incorporated or won`t give it to me because I have more than 4 rentals.

Thanks alot for your help!
Tom

 

[MikeMcCrae]

5.9 is a pretty good rate for a 3 yr fixed investment mortgage for an investor. Things in the mortgage business are not that simple. Specially when you are dealing with investors. Rental offset policies and your situation make a difference. If you have a relationship with a broker and she has got you to where you are so far, be very careful changing brokers to save a quarter point or so. On a 3 year deal if you are around the 6.25 range you are likely doing all right. Also remember that the best rate is not always the best deal. Have a discussion with your broker to check out several options.

QUOTE (Sherwoodparkcondos @ Nov 12 2007, 01:33 PM) Hi,
Anyone know if its possible to get a 40yr amortization on a rental, without having to pay extra fees or a high interest rate.
I`d like to put 25% down, on a 3yr fixed, with an interest rate no higher than 5.9%, with a 40yr amortization.
The broker I`m dealing with can`t find me one. She says some of the lenders want me to be incorporated or won`t give it to me because I have more than 4 rentals.

Thanks alot for your help!
Tom

 

[Sherwoodparkcondos]

Hi Mike,
Thanks for the advice, I agree 100%.
I had a good mortgage broker but he has recently changed careers, so I`m looking for a new one whos experienced with rental properties.

If anyone`s (someone with over 4 properties and not incorporated) and recently got a 40yr amortization on a rental, I`d love to hear about it.

Thanks,
Tom

 

[Peter]

QUOTE (Sherwoodparkcondos @ Nov 12 2007, 08:50 PM) Hi Mike,
Thanks for the advice, I agree 100%.
I had a good mortgage broker but he has recently changed careers, so I`m looking for a new one whos experienced with rental properties.

If anyone`s (someone with over 4 properties and not incorporated) and recently got a 40yr amortization on a rental, I`d love to hear about it.

Thanks,
Tom

Hi Tom,

There are several lenders out there offering extended amortizations and fully discounted rates. The applicant does have to qualify under their lending guidelines, but if that is the case, there should not be any restrictions regarding the borrower name or number of rental properties. There are also other products available with interest only payments, that like a 40 year amoritization, would result in lower monthly payments that could also be an option.

Extended amoritizations very important in an investors portfolio as they keep your monthly obligations lower, incresasing the rental surplus and therefore making your application for subsequent purchases stronger. Any banker or broker, upon review of your mortgage application and rental portfolio, should be able to direct you to a lender that meets your needs or provide with coaching on how to structure your portfolio/application to be able to obtain financing in the future.

Rebecca (for Peter Kinch)

 

[Sandy Fransham]

I work with Randy Jamesion at (403) 214-1888 ext 1 and have found him to be an excellent resource. He helps you make decisions that will make financing the future houses you indend to buy manageable! Tell him Sandy referred you!

 

[Sherwoodparkcondos]

Thanks everyone for your comments,
Tom

 

[ekisielewski]

QUOTE (Sherwoodparkcondos @ Nov 12 2007, 08:50 PM) Hi Mike,
Thanks for the advice, I agree 100%.
I had a good mortgage broker but he has recently changed careers, so I`m looking for a new one whos experienced with rental properties.

If anyone`s (someone with over 4 properties and not incorporated) and recently got a 40yr amortization on a rental, I`d love to hear about it.

Thanks,
Tom

Hi Tom: I own 4 properties and was able to buy my last one on Oct 4th, 2007 with 20% down and 40 yr amortization - 5 years - @ 5.79 fixed.
You may want to call my mortgage broker - an investor himself. He is awesome, will return your calls within mins and he is right to the point - no time wasted.
His name is Tom Hogg 905 949-4949.
Good Luck
Elisabet - Oakville

 

[Sherwoodparkcondos]

Hi Elizibeth,
Thanks for the reply, I will give your broker a call.

Tom

 

[MichelleBrown]

QUOTE (Sherwoodparkcondos @ Nov 12 2007, 01:33 PM) Hi,
Anyone know if its possible to get a 40yr amortization on a rental, without having to pay extra fees or a high interest rate.
I`d like to put 25% down, on a 3yr fixed, with an interest rate no higher than 5.9%, with a 40yr amortization.
The broker I`m dealing with can`t find me one. She says some of the lenders want me to be incorporated or won`t give it to me because I have more than 4 rentals.

Thanks alot for your help!
Tom

Hi Tom,

We only have one rental property but the mortgage is through MCAP and the amortization is 40 years. The term is 5 years fixed and the interest rate is 5.8% We only put 20% down. I don`t know if it helps that our primary residence is also financed with MCAP or that we don`t have any other properties. We aren`t incorporated.

Good Luck!

Michelle Brown

 

[kennicoll]

QUOTE (Sherwoodparkcondos @ Nov 12 2007, 01:33 PM) Hi,
Anyone know if its possible to get a 40yr amortization on a rental, without having to pay extra fees or a high interest rate.
I`d like to put 25% down, on a 3yr fixed, with an interest rate no higher than 5.9%, with a 40yr amortization.
The broker I`m dealing with can`t find me one. She says some of the lenders want me to be incorporated or won`t give it to me because I have more than 4 rentals.

Thanks alot for your help!
Tom

we have secured a couple of mortgages 40 year ammortization fixed rate less then 5.90 5 year with rbc ken

 

[MikeMcCrae]

Before I became a broker RBC was one of my favorite lenders. They have some really good programs and give best rates and terms. Unfortunatley they only allow you to borrow up to about 1.2 million and then you are cut off. But that is a great place to start. My only problem with them now is they don`t deal with brokers and you have to deal with them direct I don`t discount them though as part of your overall funding program. Talk to your broker when you find a new one and ask how RBC might fit into your program. I have 40 year amortizations on most of my properties.

 

[AChrunik]

There are a number of lenders that offer 40 yr amortizations. Before submitting to a lender have your mortgage broker be aware of the rental guidelines on how many rentals they will allow. If you are planning to buy more than 4-5 properties this will be very important when moving ahead on your revenue purchases and which lender to go to in the beginning.

 

[ArnelAliwalas]

Give Laurel Bell a call 403-988-9991 she is with BMO and has a product that I recently used for a rental property:At Bank of Montreal we are able to offer financing of up to 80% of the purchase price and amortizations of up to 40 years (conventional financing). We do offer a 3 year fully open term, which floats at prime (prime is 6.25% today). [/size] We do have another variable rate option, which is also a good choice - our 6 year variable rate mortgage has a great introductory rate of prime less 2.25% for the first three months (starting rate of 4.00% based on current prime of 6.25%) and a rate of prime less .375% thereafter (currently 5.875%). The six year gives you the opportunity to lock-in at anytime, offers a 1% cashback option, AND the last three years of the term are fully open. If you do plan to hold on to this property for at least 3 years, it offers good flexibility and a below prime rate.

Arnel

 

[askmer]

QUOTE (ArnelAliwalas @ Nov 21 2007, 10:32 AM) Give Laurel Bell a call 403-988-9991 she is with BMO and has a product that I recently used for a rental property:At Bank of Montreal we are able to offer financing of up to 80% of the purchase price and amortizations of up to 40 years (conventional financing). We do offer a 3 year fully open term, which floats at prime (prime is 6.25% today). [/size] We do have another variable rate option, which is also a good choice - our 6 year variable rate mortgage has a great introductory rate of prime less 2.25% for the first three months (starting rate of 4.00% based on current prime of 6.25%) and a rate of prime less .375% thereafter (currently 5.875%). The six year gives you the opportunity to lock-in at anytime, offers a 1% cashback option, AND the last three years of the term are fully open. If you do plan to hold on to this property for at least 3 years, it offers good flexibility and a below prime rate.

Arnel

So im thinking of buying my 2nd revenue property. Why would I want to go w/the 40yr mortgage option versus a 25yr ?? If i plan to hold the property for 5-10yrs, am I not spending good money on more interest in order to gain a marginally better cashflow ? And when I go to sell, is my principle higher on a 40yr mortgage, thereby eliminating any gains i got for the better cashflow ?

 

[RedlineBrett]

QUOTE (askmer @ Jan 31 2008, 10:10 AM) So im thinking of buying my 2nd revenue property. Why would I want to go w/the 40yr mortgage option versus a 25yr ?? If i plan to hold the property for 5-10yrs, am I not spending good money on more interest in order to gain a marginally better cashflow ? And when I go to sell, is my principle higher on a 40yr mortgage, thereby eliminating any gains i got for the better cashflow ?

If you get an open mortgage you can choose to throw as much towards principal payments as you want. You can sign up for a 40 year am and turn it into a 10 if you so choose.. By having the 40 you just make it easier on yourself as you have the option to keep your payments low if you need to.

We try and get 40 year AMs to help the current cash flow situation. Then, we build in all future cash flows into principal reduction as the property appreciates and rental rates increase.

The most difficult time to own property is at the beginning - you have no equity in it and the cash flow crunch is the toughest it is ever likely to be. 40 yr AMs make this easier to deal with so we tend to go for them.

 

[MikeMcCrae]

One of the beauties of the 40 year mortgage is that you are contracted to a lower payment amount. This helps debt service ratios on future purchases. If faster paydown is a desire most lenders allow you to make additional payments up to 20% of your monthly mortgage payment. If you do the calculations you will see that your payments are very similar to the 25 year payment. The thing is you are not required to claim the higher payment to the bank when applying for new money.