Mortgage on rental property

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I live in IL, I am hoping to buy a home (full out, no lien) in TX and rent it out. It's a family deal, so I am receiving a helluva deal. What are the TX laws governing taking out a mortgage of rental/investment properties?

gmakerley · Posted: Fri Jan 11, 2008 2:21 pm Post subject:

ernie, i'm afraid i can't comment on texas laws concerning mortgages on investment properties, but i have to admit i am perplexed by your question.

you initially state "full out, no lien" which i take to mean that you plan on not borrowing any money to make the purchase. if that's the case, why are you worried about a mortgage? a mortgage is a lien, quite simply.

are you addressing the thought of getting a mortgage after you already own it? i don't imagine there would be much problem, but you would be wise to wait for a texas lender to answer the question.

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I plan on buying the house outright, then taking a lien to make minor cosmetic changes.

gmakerley · Posted: Fri Jan 11, 2008 3:30 pm Post subject:

that's kind of what i thought, ernie. we have some texans on here periodically; i'm sure they will monitor this thread and respond. in the meantime, if i hear of any particular regulations, i will let you know also.

ezmortgageloanz · Posted: Sat Jan 12, 2008 4:51 pm Post subject:

If you are entertaining the idea of doing some rehab after purchase, you could entertain a fix and flip loan.

These types of loans allow for 100% financing of the purchase price (which doesn't sound like a component you will need) + cost of repairs + closing costs + monthly mortgage payments during the loan period (in most cases).

edited to remove solicitation......

Regards,

Scott Miller

ckalvesmaki · Posted: Sun Jan 13, 2008 8:51 am Post subject:

Ernie....investment properties are not covered by TX A6 cash out rules......What kind of condition is the home in? It might be easier to get a loan for the home and use your cash to fix it rather than paying cash and then getting a loan.........

lisascherzer · Joined: 04 Jan 2008 Posts: 575 66.11 Dollars($)

Hi Ernie,

You can borow up to 80% of the homes value in texas. As far as it being an investment property, that won't matter much. The only difference is that lenders charge a higher rate of interest on an investment property. If you own a home in IL, you may want to consider taking cash out of that since the interest rate is lower on a primary residence.

Another option is to purchase the home with a mortgage instead of paying cash and then taking a mortgage for the cash out. The reason I suggest this is that you will only have one set of closing costs instead of two.

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