Click here to join our mailing list to receive the latest news and updates as they happen. Unsubscribe any time.

The Evolution of Rental Financing

Rental-Financing (2)Ever since the credit crisis, there’s been an ongoing clampdown on mortgage risk. Nowhere is that more evident than with rental and self-employed mortgages.

This week’s Globe column looks at rental financing—and what makes it more challenging today than, say, four years ago.

If you’re a well-qualified borrower and you only own a few properties, this isn’t a major concern. But when you have a larger rental portfolio or need flexibility with your application, it’s a different story.

When researching for this article, I ran through a bunch of rental scenarios with Rick Robertson over at Mortgage Mentor. It was instructive to see just how fast lender options shrink when you need one that allows:

  • Flexible income treatment
    (e.g., 80% rental offset)
  • Corporate borrowers
    (i.e., rentals in a company name)
  • Secondary financing
  • and so on…

There’s so much talk about how mortgages are becoming commoditized. Well, rental financing is one realm of the mortgage world that’s anything but.

It’s an area where knowing your lenders is everything, and where an experienced mortgage professional always adds value.

More: Buying a rental property? How the financing game has changed

Rob McLister, CMT