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I am looking at either buying a Townhome or condo unit in the area I live in as an investment. Recently I went to BoA and they had said I needed a minimum of 30% down. Is this the norm nowadays? I plan on visiting other banks and lenders but figured I'd ask here too. I am close to the 30% down but I'd rather spend some of the money on fixing it up before renting it out.
I am looking at either buying a Townhome or condo unit in the area I live in as an investment. Recently I went to BoA and they had said I needed a minimum of 30% down. Is this the norm nowadays? I plan on visiting other banks and lenders but figured I'd ask here too. I am close to the 30% down but I'd rather spend some of the money on fixing it up before renting it out.
I actually recently used BoA for an investment property and the minimum down payment was 20%. The transaction actually went very smoothly and I couldn't be happier. I only paid points to get the interest rate down to a level I was looking for.
Citron
Without addressing your question (because I don't know the answer and wise people ahead of me answered it) I would like to comment that even though there are some great values out there now, I know I would be less than comfortable without larger reserves than it sounds like you have. One unintended event could wipe you out.
If you do proceed, good luck, there is money to be made...be careful, there is money to be lost too.
SKH is correct 20% down is the minimum, but you will get a better deal with 25%. Points and/or origination fees also not necessarily required, but your rate would go up substantiallly.
SKH is pretty misleading with the post as I am pretty sure you could not price the rate high enough with a 620 FICO and no points.
Citron
Without addressing your question (because I don't know the answer and wise people ahead of me answered it) I would like to comment that even though there are some great values out there now, I know I would be less than comfortable without larger reserves than it sounds like you have. One unintended event could wipe you out.
If you do proceed, good luck, there is money to be made...be careful, there is money to be lost too.
I also had concerns about not actually making any money or not having enough in case something horrible happened to the unit. But the way I look at it is- If I can afford to fork out 2x the monthly expense of the condo with just my current income without any issues then it isn't the worst thing I could be doing with the money I do have. Right now I'm at about 25-26% down payment of the average selling price of the condo's currently selling in that specific community. I do already have enough for the average cost of closing saved up. Just not 30% for a down payment. So not ready yet but getting close and starting to look at loan options. I am fortunate enough that if something did happen I could cut expenses elsewhere. Such as to stop paying extra on my current mortgage or other pretty painless things.
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