Qualifying for real estate as an investor

There is a significant difference in the criteria between those intending on living in the home (primary residence), second homes, and investment property.

Underwriters are looking closely at investment properties in several areas. One area to keep in mind is appraised values. It is very common for lenders to require an appraisal review (at your expense) in which an appraiser of their choice reviews the comps to see if they are accurate and current. This is especially the case on appraisals that have been re-certified. In these cases the value is almost always reduced. The appraiser will valuate it very cautiously being as he is working for the lender.

Another area to be aware of is investor experience. A borrower with no investment experience that has been carrying a 400K property as his primary residence and then decides to buy a 2 million dollar property will be scrutinized closely for lack of this type of experience. Be prepared to explain fully the investment purchase and the benefits you expect to see from it.

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