Here’s a great article explaining the loan-to-value problem for many investor-landlords. If you are a new landlord or one with not a lot of capital then it may be getting more difficult for you to obtain a loan in order to keep doing business. Mortgage lenders are increasingly opting to fund business transactions on a 75% LTV as opposed to a 90% LTV. That means borrowers have to put more money down in order to secure a loan, but investors traditionally don’t like to put too much money down.
These policies will undoubtedly favor landlords who have cash reserves and capital from which to draw should things get difficult. Landlords who are having a tough go of it will continue to have a tough go of it. Landlords will additional money to invest will have the upper hand and the added edge to stay competitive. It is now officially difficult to obtain a loan for investment purposes.
This entry was posted
on Wednesday, June 11th, 2008 at 1:01 pm and is filed under Landlording, Mortgage News, Real Estate Investing.
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