15% Down Mortgage for Investors

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Phoenix area real estate investors expect a minimum 20% down payment for all rental purchases.  Well, times have changed!  With an improving  Arizona Real Estate market comes change.  One such change – a lower down payment requirement for investment property purchases.

15% Down for Investment Property Purchases

15% down is the new down payment requirement for rental property purchases using a Conventional home loan.  However, the mortgage industry is not the hero.  In fact this change has nothing to do with AZ mortgage guidelines changes.  Mortgage insurance companies refused insurance for any investment property.

Finally, that all changed.  As a result, 15% down is allowed on rental property purchases.  Mortgage insurance companies are separate from mortgage companies.  Previously, mortgage insurance companies refused to insure mortgages on investment property in Maricopa County.

Due to the fact mortgage insurance is required on Conventional mortgages where buyers put less than 20% down, investors were forced to accept the 20% down payment rule.  After-all, this kept mortgage insurance out of the picture.  Finally, mortgage insurance rules changed and mortgage insurance companies now insure rental property purchases with just 15% down.

Lenders Were Ready All Along

AZ mortgage lenders have had a product allowing 15% down on rental purchases for a long time.  However, without a mortgage insurance company insuring the loan the product was useless.  Now that mortgage and mortgage insurance companies support 15% down on rental property investors have a great new option.

By Jeremy House
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