Investors Have A Home At Ark
The current market is full of opportunities for investors. We’ve created several programs to help you finance investment properties, whether you’re a first-time investor or an experienced one. Start your journey by speaking to an Ark Advisor. They’ll come up with a game plan that will, well, get you in the game.
For over four decades, Ark has helped investors secure mortgage loans that align with their business plans. We are a community-based lender that stays closely connected to the real estate markets we serve. This local focus gives us a deep understanding of the neighborhoods you invest in, as well as insight into nearby areas with strong investment potential. With Ark, you’re not just working with a mortgage lender—you’re gaining a trusted colleague.
Products & Programs for Investors
Multi-Property Discount
Pay application fees of a single property when you finance two or more properties… and save.
Investors (DSCR) Loan
Qualify for the loan using your property’s rental income. An Ark Advisor will show you how.
Alt-Doc Loan
No W2? Ark’s Alt-Doc (also called “No-Doc”) can qualify you with alternate ways to document your income.
Qualifying for an Investment Loan
While the mortgage process is similar to a primary residence, qualifying for an investment loan is somewhat different. These are things a mortgage lender like Ark considers for an investment loan:
- Credit Score: A strong credit score is important. Ark typically targets scores of 720 or higher, though requirements may vary by program.
- Down Payment: Investment properties generally require a higher down payment, typically 20–30%.
- DTI (Debt-to-Income Ratio): Lenders assess your DTI to ensure you can comfortably manage the new obligation. A ratio below 36% is ideal, though Ark may allow up to 45%, depending on the loan structure.
- Cash Reserves: We verify that you have sufficient reserves to cover several months of mortgage payments, recognizing that rental income may not be immediate.
- Rental Income: For experienced investors, existing rental income may be considered. For new investments, we evaluate projected income based on the local rental market.
- Property Type & Condition The number of units and the overall condition of the property can affect loan eligibility and terms.
- Experience: Experienced investors are often viewed as lower risk when they demonstrate a strong borrowing history.
Remember, investment property loans usually have higher interest rates and stricter requirements compared to primary residence loans. It’s also important to factor in additional costs like property management, maintenance, insurance, and taxes when calculating the feasibility of an investment property mortgage.
Is an ARM Loan Right For Me?
In many cases, an Adjustable-Rate Mortgage (ARM) can be a smart option for a specific transaction. While a fixed-rate mortgage offers the same payment for the life of the loan, an ARM features an interest rate that may adjust after an initial fixed period, which can cause your monthly payment to increase or decrease. Because ARMs often offer lower initial interest rates, they may enhance your purchasing power. Speak with an Ark Advisor to see if an ARM is the right fit for your strategy.
Investing FAQ
Can I use a co-borrower to help me finance an investment property?
Yes, co-borrowers may be used to help qualify for an investment property, including to address debt-to-income concerns. Program guidelines vary, and co-borrower requirements should be reviewed in detail with your with your Mortgage Advisor.
Can I use my IRA when buying an investment property?
Yes, a Self-Directed IRA (SDIRA) may be used to purchase certain investment properties. Strict federal rules apply, including prohibited-transaction and usage restrictions, and financing options may be limited. It’s essential to consult your Mortgage Advisor and a qualified tax professional or CPA before proceeding.
How much do I need to put down when buying an investment property?
Down payment requirements for investment properties are typically higher than for primary residences or second homes. Most investment loans require 20–25% down, depending on the property type and loan program. Speak with your Mortgage Advisor for program-specific guidelines.
How many investment properties can I finance at one time?
Investors can finance up to 10 properties simultaneously. To help finance investment properties, ask your Personal Mortgage Advisor about Ark’s Cash Advantage Program, which lets you initially pay cash and then refinance qualifying properties in less than the usual six months. And when refinancing, Ark’s Multiple Property Discount only charges borrowers the application and commitment fees for the first property and waives those fees for all additional properties refinanced at the same time.
What is loan-to-value (LTV) requirement for financing an investment property?
For a single-unit investment property, most programs require a 20–25% down payment, resulting in a maximum LTV of 75–80%. For 2–4 unit investment properties, a 25% down payment (75% LTV) is typically required.
What are the income requirements for financing an investment property?
Required income for financing your investment property will vary depending on the amount of the monthly mortgage payment and other debt considerations. The total debt-to-income ratio (including the mortgage payment) generally cannot exceed 45%. Consult with your Personal Mortgage Advisor for information that pertains to your situation.
How long do I need to wait to refinance an investment property to take cash out?
Typically, you will have to wait through a six (6) month seasoning period prior to using a cash out refinance to take equity out of your investment property. There are programs, such as Ark’s Cash Advantage Program (CAP), that may allow you to cash out immediately after your purchase. Contact a Mortgage Advisor to discuss the specific programs and their guidelines.
