Trying to Buy and Need More Income – Stress Free Mortgage

If you have ever looked at purchasing a property that has an additional dwelling unit or ADU, but have been unable to use that additional income to help you qualify for a mortgage loan, look no further.
FHA has recently changed their policy to allow a borrower, living in a property that also has an ADU unit where there is rental income, to be able to use that rental income in addition to their own income to qualify for a mortgage loan. So for example, if you are purchasing a property that has an ADU but is not currently rented, but would potentially rent out for $2,000, then the lender will use 75% of that income or $1,500 a month as additional income to help you qualify for the loan.
FHA financing also allows for a low down payment of 3.5% of the purchase price and depending on your credit score, typically has a lower interest rate than a conventional mortgage. If you do have a credit score below 700, it can be beneficial to look at an FHA loan to purchase as they are more forgiving with lower credit scores and can also go below a 600 credit score as well.
The other benefit of an FHA loan is that you can do a refinance when rates are lower (and if it makes sense) without an appraisal or income verification as long as you meet certain requirements. This means that if you can’t refinance to a conventional loan because of credit or other issues, you can still get a lower rate to have a lower payment.
Knowing all of your options and what’s available to you as a home buyer is the key to getting approved for a loan and working with a professional makes all of the difference in getting your loan approved.
For more information please call 661-295-0555 or visit www.stressfreemortgage.com.