Understanding Non-Owner Occupied Mortgages

Thinking of purchasing another home for investment purposes like renovating to sell for a profit, using the property to source rental income, or co-signing a loan to help out a loved one? Or are you already a real estate investing pro looking to refinance and free up some cash to put back into the property? Whether you are just starting to dip your toes into the real estate investment pond, you’re a seasoned professional, or you are looking to help a loved one secure a loan, PFFCU offers financing to meet your needs.

Purchasing a rental property comes with advantages like tax benefits, cash flow through rental income, and can help build equity for your future. Buying an investment property to flip or rent out, or acting as a co-signer on a home you do not intend to live in requires you to secure a different type of mortgage known as a non-owner occupied mortgage. When going through the lending process there are some things to keep in mind, like larger down payments and higher rates. Here, we’ve outlined some additional information that can be helpful when deciding which option is right for you.

How Much Down Payment Do You Need?

With a traditional home purchase mortgage, down payments can sometimes be as low as 3-5%. When you are looking to secure a non-owner occupied mortgage that amount can increase significantly, anywhere between 20-30%. A non-owner occupied transaction is riskier to the financial institution which results in requiring a larger down payment.

Are the Rates the Same as a Traditional Home Purchase Mortgage?

Investment properties or mortgages tied to homes that aren’t your primary residence typically have higher rates when compared to your standard home purchase mortgage. Your rate will depend on your credit score, the type of property you are looking to finance, number of dwellings, as well as your down payment.

Ready to purchase your next investment property, act as a co-signer for a home loan for a family member, or looking to refinance your existing non-owner occupied mortgage and free up your cash flow? PFFCU offers a 15 or 30-year fixed rate Conventional Non-Owner Occupied Purchase Mortgage with low rates and no application fee. We also offer a 15 or 30-year Conventional Non-Owner Occupied Refinance Mortgage or a 15-year fixed rate EXPRESS Refi Mortgage. For a limited time, we’ll even waive the regular $995 EXPRESS Refi Mortgage fee1 when you refinance your mortgage held elsewhere. For additional information and to speak with a knowledgeable Mortgage Advisor give us a call at 267-332-3400.



* Police and Fire Federal Credit Union does not provide tax advice, please consult a tax advisor.

  1. $995 EXPRESS Refi fee waiver available for EXPRESS Refi transactions only, purchase loans or refinance of an existing PFFCU portfolio loan does not qualify. EXPRESS Refi products are available for loans up to $1 Million. The offer applies to loans with a completed application date between June 1, 2019 through December 31, 2019, and closing date on or before February 29, 2020. Offer is subject to credit approval and underwriting and is subject to change without notice. No other discounts apply, cannot be combined with any other offers. Contact us for details.