For a real estate investor buying and financing a first property, it might be a little more difficult to qualify compared to a loan to finance a primary residence. Both require fully documented financials and a credit report review but as might be expected, financing investment properties will require more down help qualifyingpayment, a higher credit score and slightly higher rates.

Until an investor can show at least two years of landlord experience, evidenced by copies of Schedule E on last year’s federal income tax return, the investor must qualify without the benefit of any rental income from the subject property. But there are ways to increase the likelihood of approval that many may not be aware.

One way is to simply decrease the monthly payment the lender uses to determine affordability and this can be accomplished in several ways. Lenders use PITI, principal and interest, taxes and insurance to calculate debt ratios. A longer term loan will have lower payments than a shorter one. If a 15 year loan is preferable but pushes the debt above allowable limits, a 30 year loan can help. And when obtaining homeowner’s insurance, you can decrease the monthly payment with a lower premium. Try combining policies and increasing deductibles for a less expensive property. Remember, the mortgage isn’t permanent and you can always refinance later down the road as conditions change.

Regarding income, certain types of income may be rounded up if the income is considered non-taxable. Non-taxable income includes income such as IRA rollovers, child support, qualified Roth distributions and disability income among a host of others. Lenders will multiply the non-taxable income by 1.25 percent and use the higher amount for qualifying. If there is a $2,000 per month income and qualifies as non-taxable, the lender will instead use $2,000 X 1.25 = $2,500 in addition to traditional income.