How Much Leverage Can I Get Through A Mortgage?

Mortgage Loans

Mortgage lenders will often lend up to 100% of the value of the property.

There are two types of leverage when it comes to mortgages: for your primary residence and for rental properties.

Primary Residence Leverage

Many lenders will offer a borrower a chance to acquire a property with 100% financing.

This type of financing can come in the form of many different loan types.

The loans that offer the lowest monthly payments offer the highest opportunity for using leverage.

If your goal is to outlay the minimum amount of cash to own a property than a 100% combined loan to value minimum payment option loan may help you.

The first 80% of the loan is a minimum payment option loan that usually allows you to pay less than the interest only payment. The final 20% is a loan that has a higher interest rate. The overall combined expense is usually lower than any other available type of financing.

Some lenders also allow borrowers to cash out up to 125% of the value of a property. These types of loans are usually full documentation loans where a borrower must disclose and document their income, assets, employment and other loan requirements.

Rental Property Leverage

Many mortgage lenders offer borrowers the opportunity to purchase rental property with 100% financing.

This also allows a borrower to get maximum leverage in a real estate investment.

Mortgage lenders may sometimes cap the total number of real estate investments you may have at any one time in order for them to approve you for another loan. This varies between lenders, and some have no restrictions at all.

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