15% Down Mortgage for Investors

Investors in the Phoenix area real estate market have become accustomed to purchasing AZ rental property with a minimum 20% down payment requirement from mortgage lenders.  I am happy to share that times are changing for the local real estate investor.  With the improvement in home prices in Arizona comes positive change in the mortgage world.  AZ investors now have the option to put as little as 15% down when financing a rental property!  Now, it would be wonderful if the mortgage industry could take the credit for this improvement as we need some good press.  However, as strange as it sounds this new lower down payment option is available to investors thanks to absolutely no change in AZ mortgage guidelines!

The one and only reason investors have been forced to put 20% down on rental property purchases has been due to mortgage insurance regulations.  Those regulations have now changed which is precisely what has made 15% down an option for investors.  Mortgage insurance companies (which are completely separate from mortgage companies) in the past have refused to insure mortgages placed on investment/rental property in Maricopa County.  Based on the fact that mortgage insurance is required on any mortgage for a real estate transaction where the buyer puts less than 20% down (except with VA/USDA loans), investors have had to put at least 20% down to avoid mortgage insurance in order to obtain a home loan to finance a rental property.   Not anymore!

Lenders Have Just Been Ready All Along

AZ mortgage lenders have had a mortgage product that would allow for 15% down on an investment purchases for a very long time.  The product, however was 100% useless until the mortgage insurance industry decided to deliver a mortgage insurance product for investment property home loans with less than 20% down.  Now that we have both a mortgage product and a mortgage insurance company willing to insure that product, investors can buy rental property with 15% down.

While there are only a handful of players in the mortgage insurance world, not all of them are offering this product.  In fact, only one of the major mortgage insurance companies is taking this progressive step forward.  We will have to play by this companies rules for now.  Phoenix area investors must have a middle credit score of at least 700 to qualify for the 15% down option.

If you are looking to buy an investment property and want to see if this product is right for you please call or email me today.

By Jeremy House
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