Buy to let mortgage - Florida (insurance, loan, property tax, credit score)

[Floridadream]

I would like to get a buy to let mortgage with a large down payment - what criteria do I have to meet.

[renriq02]

What is a 'Buy to let mortgage'?

[Floridadream]

A Buy to let mortgage - where the owner pays off the loan on the property by renting it out to tenants.

[renriq02]

doesnt make sense...

are you speaking about owner financing?

Originally Posted by Floridadream

A Buy to let mortgage - where the owner pays off the loan on the property by renting it out to tenants.

[Floridadream]

Sorry don't know how else to explain this - buy to lets are common in the U.K but not sure what it is known as in the states. Perhaps owner financing is the term you use.

[Floridadream]

The income from the property pays the bank loan

[renriq02]

or it maybe where a borrower is looking to buy an investment home.

he rents out the house to renters....and with the rent money he pays the mortgage?

[renriq02]

You need a mortgage to purchase an investment property.

Most lenders require 5-10.....they may now require 20% down with a 720 credit score

Originally Posted by Floridadream

The income from the property pays the bank loan

[galore]

Don't forget that many (all?) states in the US use property taxes to fund schools, city services, hospitals etc.

As a result, it isn't uncommon to pay 3% of the assessed value in tax EACH YEAR. Like here in Dallas, if you buy a $300k home, you'll have to pay $9000/year or $750 per MONTH in property taxes. A 30 year mortgage, with 20% down, is still $240k and at 7% interest (reasonable, if it isn't a homestead) principle+interest is $1600/month.
So you pay $2350/month on that investment property. Hire a tax consultant to find a way to deduct interest+property tax from other taxes - not sure, how possible that is for a non-owner occupied home with the owner living outside the USA (as you seem to).

GOOD LUCK finding a renter who covers that + insurance and wear (homes aren't built to last in the US (after 30 years of rental, the home will be a shack)).

Rentals work for apartments and low-end "slummish" houses (where tax+mortgage are really low - you can buy a $80k shack cash and rent that out for $500/month - that'll probably work).