Due to tight lending standards, it can be difficult for home seekers to obtain a mortgage on a single-family residence. But according to The New York Times, qualifying for a loan on a rental property may be even harder.
Real estate experts say borrowers should be ready to accumulate more documentation and be prepared to pay a higher interest rate and down payment if they are approved.
"It looks a lot easier than it is," Neil Garfinkel, a partner at a New York-based real estate practice, told the paper.
John Manning, a mortgage broker from Brooklyn, told the Times that rental unit buyers can expect to pay between 25 percent to 35 percent as a down payment. He added that borrowers' incomes and credit scores will also play a role in whether or not they will be approved and what they can expect to pay in mortgage interest rates.
Before applying for loans, consumers may find it wise to review their credit reports and credit scores. This will help give them a better sense of whether they need to work on improving those scores first.