How to Successfully Prepare for Financing a Rental Property

If you’ve decided you’re ready to invest in real estate and that you’ll also be looking at financing the property. The tips below will help you prepare for the underwriting process of your potential loan!

TIP: If you haven’t found a Lender yet, view Doorvest recommended partner to chat with any who interests you.

Tax Returns

 

Start gathering your tax returns and double-check with your chosen Lender to see how far back they need to see.

 
 

Pay Stubs, W2s, or Proof of Income

 

If you’re self-employed or have other sources of income (such as child support), you may need to show your lender proof through 1099 forms, direct deposits, or other means.

 
 

Bank Statements and Other Assets

 

In order to get an idea of available assets, most lenders will require a few months of history when it comes to your assets statements. Remember, if the document is 8 pages long, even if the last page is blank, the Lender will need ALL 8 pages.

 
 

Credit History

 

Be prepared to have a soft or hard credit check by your chosen Lender. If you are shopping rates with multiple lenders, be sure to ask them how your credit score may be affected when they run your credit report.

 
 

Identification

 

You will want to ensure your form of identification (driver’s license, passport, etc.) is not on the verge of expiration.

 
 

Employment History

 

Most lenders will want a detailed accounting (5-10 years worth) of your employment history and an explanation of any gaps in your employment. It will be a good idea to prepare your employer that verification will be needed on their end.

 
 

Life Milestones

 

If you have had any big milestones such as bankruptcy, divorce, etc., be sure to share with your chosen Lender so they can plan accordingly.

 
 

Other Documents

 

Are you purchasing your new investment home as an LLC or in a Trust? You will need to provide your Lender with the associated documentation. For example, purchasing as an Entity, you will need to provide your articles of incorporation, statement of good standing, as well as other documents.