Does personal income help to determine mortgage approval for investment property?

I'm want to start investing in multi unit property but want to get a little more information as to what might be expected before doing so. Will my personal income factor in to the banks decision to approve. For example, if i made 30K a year is it possible to get approved for a 500K loan from the bank as long as the property, when fully rented, has the potential to pay the mortgage?

That depends on whether the property has more than 4 units. If it has 4 or less then it can be considered a residential loan and income may factor in heavily. If the property has more than 4 units, your income is a factor, however most lenders will be more concerned about the amount of income the property generates or your debt to service ratio. Also the type of property will also be a factor. Typically this will tell you how much of a loan you can apply toward a property. There are several lenders like Interbay that do not require that you disclose your personal income and will give you a loan based off of your credit score and debt to service ratio of the property. I have seen loan programs that will help you with a score in the high 500's. I always tell my clients to try thier bank first. If that does not work out, talk to a broker who specializes in commercial lending. Be sure to ask question about thier experience. There are many loan officers out there that will tell you they can do commercial lending when all they have ever done is residential lending. The rules are different so what applies to a residential loan doesn't translate in the commercial world.

Hope this helps.

It depends on a lot of things, like your credit and what your assets are. It is best to talk to a lender in order to get a good idea of what you can qualify for.

Well guy, if the property you are looking at is to be purchased by you, and other people, then of course, they will look at you, your credit history, and your assets. If you represent a company, like McDonald's, they will look at the assets of McDonald's. What the lender is looking for is the guarantee that the property will get paid off, and if not, what the chances of them recovering the investors money. If you make 30k, I doubt you will ever get an approval for 500k. Even if you hope, think, or lie to them about the potential of the property coming up with the rest of the monthly obligation, and you don't have a track record of doing this type of business, you should be rejected right off the bat. The investors and lenders will not assume any risk. What makes your property fully rentable, when there are so many others out there? I'm sorry, probably declined at this point.