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Buying Mortgage on Non-Owner Occupied

We recommend that you are stricter with non-owner occupiers than with people who intend to live in the property as they typically have a higher default rate. It's not their home and if a tenant moves out and trashes the home, they may not want to spend money fixing it up again. Remember that they may be buying the property for less than the appraised value.

Note that the ITV refers to the "as is" value, not what the property could be worth if fixed up. Always insist on an appraisal by a licensed appraiser, preferably of your choosing.

ITV means Investment to Value. LTV means Loan to Value.

Example: A house is worth $100,000.

The mortgage is for $80,000. The LTV is 80%.

You buy this mortgage for $70,000. Your ITV is 70%.

You may just want to buy part of the mortgage and thus reduce your investment and risk.

Non Owner / occupier buying single family home or condo.

Credit rating Investment to Value Desired Yield to you
A+. 
No 30 day late last 12 mths
 FICO=680+		 75% 12.20%
65-74 11.70
55-64 11.20
A
1 30 day late last 12 mths.
FICO=660-680		 75% 12.30
65-74 11.80
55-64 11.30
A-
2 30 day late last 12 mths.
FICO= 640-660		 75% 12.45
65-74 11.95
55-64 11.45
B+
3 30 day late last 12 mths.
FICO=620=640		 70% 12.60
60-69 12.10
50-59 11.60
B
4 30 day late last 12 mths.
FICO= 600-620		 70% 12.75
60-69 12.25
50-59 11.75
C
60 day lates last 12 mths.
FICO=520-600		 65% 12.90
55-64 12.40
45-54 11.90

Remember, the above are guides only. Never let anyone tell you how to invest your money. As a practical matter, if someone has put up 10%+ of their own money to buy the property it is very unlikely the loan will default. There are exceptions. In Texas some years ago, homes fell in value by 40% and thousands of home owners gave their homes to the bank or were foreclosed.

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Commercial Real Estate
Yield to aim for when buying mortgage secured on commercial real estate

[Buying existing mortgages] [What is owner financing?] [3 advantages] [4 disadvantages] [Why people sell mortgages] [The effect of compounding] [Partial purchases] [Evaluating potential foreclosure] [First or second mortgages?] [Frequently asked questions] [Valuation seller-held mortgage] [The 5 Cs. Collateral] [5Cs. Credit and capacity.] [5Cs. Commitment and consistency] [Discounted mortgage calculator] [Mortgage credit  ratings] [Owner occupied real estate] [Non owner occupied real estate] [Commercial real estate] [Find seller financed mortgage] [Find owner financed mortgages (contd)] [On-line mortgage and note buyer database] [Legal questions] [Mortgage and deed of trust purchase contracts] [Final steps] [Mortgage fraud] [Paying for seller held mortgage] [American Cash Flow Association]

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