How To Qualify For Mortgage on Rental Properties!

5 Vital Steps to help you qualify for financing on your next rental property. I financed 3 different properties in 3 years while keeping all mortgages. I'm going to break down how I did this, the math behind it and the tips you need to follow to get started in real estate investing!

Vital Steps:
#1 - Have a good credit score
#2 - Low Debt to Income Ratio
#3 - Find Passive Income
#4 - Increase Your Income
#5 - Have Proof of Income

If you can do these things banks will be more likely to lend to you. I was able to keep my debt to income ratio really low while investing in rental properties. This low debt to income ratio helped me qualify for multiple mortgages and scale my real estate investments quickly.

On my first property I had a debt to income ratio of only 14%. As time went on I increased my income through raises at my job and through passive income with an Airbnb. This allowed me to finance my first rental house and actually decrease my debt to income ratio to 13%.

I once again increased my income over time and was able to finance a third house. Even with the increased debt I kept my debt to income ratio below 22%.

Typically when a bank reviews potential mortgages they like to see a debt to income ratio of no more than 36%. I suggest keeping housing costs below 28%. However, the lower you are able to keep you debt to income ratio then the more likely the bank will be willing to lend to you on future real estate investments. You may even be able to finance a rental property without showing proof of rental income, simply because you have a low debt to income ratio.

Remember: Christ is King, Enjoy Life, and Invest Smart.