Banks DO NOT want you to know this!
Millions of homebuyers face this problem every day.
You write off too much and don’t show enough income to qualify for a traditional mortgage, or you are an entrepreneur with a lumpy income. In both of these scenarios (and many others), you would not be able to qualify for a mortgage.
What if you could qualify based on the “Rental Income” of the property and not your income?
Doesn’t that make more sense?
If the investment property generates enough rental income to cover the mortgage payments, then why would my income be relevant?
That is exactly how this works!
We launched the AM Rental Coverage Plus in January, and the feedback has been phenomenal; that’s why I wanted to resend this loan program to our clients.
Here’s how it works:
AM Rental Coverage Ratio =
Gross Rental Income / Total Debt Service ≥ 0.75:1
Total Debt Service = Mortgage expense (principal, interest, and taxes)
What Is a Good Rental Coverage Ratio?
The AM Rental Coverage Ratio needs to be 0.75 or above. This means the property is generating at least 0.75% income to mortgage obligations. A ratio below 0.75 indicates that the property may struggle to pay principal and interest charges in the future as it may not generate enough income to cover these expenses.
What Factors Affect the AM Rental Coverage Ratio?
AM Rental Coverage Ratio is affected by two items: operating income and debt service. I’ll talk about this below, but Operating income (rent) is trending up, and debt service (mortgage rates) is trending down. That is to say, future margins will be higher (income up Plus costs down).
There are 2 constants in the U.S. real estate market:
1 – Property/Rental prices will go up (income)
2 – Rates will eventually be lowered (cost)
Here’s why:
1 – There is a shortage of 3-7M homes in the U.S. (depending on the publication).
With mortgage rates where they are now, the marginal buyer cannot afford to purchase a home and is forced to rent. This is echoed by many institutional funds looking to acquire as many single-family homes as they can.
Trend = income up
2 – Timing is debatable, but it is widely assumed rates will be lowered at some point.
Trend = costs down
What makes the U.S. real estate market so unique is that you can buy a home today and then refinance it at a lower rate when rates fall or when the price goes up.
There has never been a better time to own U.S. residential real estate as an investment!
In summary, America Mortgages’ Rental Coverage Plus offers a groundbreaking solution for both U.S. expats and non-resident investors. By focusing on rental income instead of personal earnings, this program helps people overcome typical mortgage hurdles. With a dedication to clear and accessible mortgage options, America Mortgages remains at the forefront of real estate financing. Secure your path to financial success with AM Rental Coverage Plus today. Contact us now to learn more and get started!
