How do I get a mortgage for a rental property?

Get Preapproved Getting a mortgage for a rental property, also called a non-owner-occupied loan, isn’t much different from getting a mortgage for a primary residence. In most cases, you’ll use a Fannie Mae or Freddie Mac loan for an investment property that is either a fixed-rate or an adjustable-rate mortgage (ARM).

Should you get a mortgage for a rental property?

When getting a mortgage for a rental property, you don’t have as many financing options as you would with buying a home. There are typically more hurdles to jump than a traditional mortgage, and interest rates are higher. Always compare your options to find a loan with the best rates and terms available.

Does private mortgage insurance apply to rentals?

Because private mortgage insurance (PMI) doesn’t apply to rentals, you must have a larger down payment, usually 15% to 20% minimum. However, in some cases, you might need to put more down. For example, if you’re buying a multiunit property, the lender may require 25% down. Debt-to-income ratio.