For Montgomery Township, Skillman and Belle Mead owners thinking about a first rental property: which loan reads your income and which reads the rent, how the equity in your home can help, and what changes when a company holds title. Fidelity Residential is a direct, licensed mortgage lender with a New Jersey office on Route 36 in West Long Branch, in Monmouth County, and we lend across New Jersey.
Pick the closest, or call and talk it through.
Fidelity Residential · NMLS #103098 · Equal Housing Lender
Montgomery Township, Skillman and Belle Mead included, counts about 23,800 residents and about 8,500 homes in the American Community Survey’s 2020 to 2024 estimates.
Nearly half of households, an estimated 47.9 percent, moved into their home between 2010 and 2019. About 5,100 of the roughly 7,200 owner-occupied homes, an estimated 71.7 percent, carry a mortgage. For owner-occupied homes, the Census Bureau’s median value estimate is about $795,200.
Fidelity Residential is a direct mortgage lender licensed in New Jersey under a Residential Mortgage Lender License. Our office is at 121 NJ-36, Suite 230, West Long Branch, in Monmouth County; we do not have an office in Montgomery Township, and we lend across New Jersey.
Source: US Census Bureau, American Community Survey 5-year estimates, 2020 to 2024. Estimates, not counts.
The same rental can often be financed either way. The difference is what the lender reads.
A conventional investment property loan is a standard mortgage on a rental, underwritten on your pay stubs and W-2 forms or tax returns, your debts and your credit. When your returns show what you earn, it is often the simpler choice.
Investment property loansA DSCR loan compares the rent, from the lease or the appraiser’s rent schedule, with the full monthly payment, taxes, insurance and any association dues included. No tax returns or pay stubs are used, and it is a business-purpose loan.
DSCR loansOn a conventional investment loan, gift money cannot be used, savings after closing are required, and the number of financed properties one borrower can hold is limited.
Compare the twoWhich fits a first rental? If your tax returns show your income and you hold few other financed properties, a conventional loan often fits cleanly. If write-offs make your returns show less than you earn, a DSCR loan looks at the rent instead.
Owners who have been in their homes for some years often have equity to draw on. There are two common ways to use it toward a rental, and each one adds a payment the lender counts.
A home equity line. A line of credit on the home you live in lets you draw what the rental purchase needs. Money borrowed for closing must usually be secured by something you own and documented, and its payment counts as a debt.
A cash-out refinance. A new, larger mortgage on your home pays you the difference at closing, and the cash may be used for anything. It replaces the mortgage you have now, so compare the whole cost first.
Savings instead. Bank and investment statements, every page, show the money for the down payment, the closing costs and the reserves a rental loan asks for.
Your name or a company. On a DSCR loan, title can be in your own name or in a company such as a limited liability company. On a conventional loan the property is normally held in your own name and counts toward the limit on financed properties.
The people behind the company. When an LLC signs, its owners sign a personal guarantee, an agreement to repay if the company does not, and the lender checks the credit of each owner who signs it. How to hold title is a decision for your CPA and attorney.
The prepayment clause. Most DSCR programs charge a prepayment penalty in the early years, where the law allows one, and accepting one can change how the loan is priced. If you expect to sell or refinance soon, ask to see the loan with and without a penalty, side by side.
Business purpose. A DSCR loan is for investment property. At closing you sign a statement that the loan is for business purposes and that nobody on the loan lives in the property.
Yes. Fidelity Residential is a dba of PFN Lending Group, Inc. (NMLS #103098), which holds a New Jersey Residential Mortgage Lender License, and we lend across New Jersey. You can check the licence on NMLS Consumer Access (opens in a new tab).
No. Our office is at 121 NJ-36, Suite 230, West Long Branch, NJ 07764, in Monmouth County, and we lend across New Jersey. Call 732-686-9999 to talk with a licensed loan officer.
Often, yes. A home equity line or a cash-out refinance on the home you live in can provide the cash. The borrowed money has to be documented, and its payment counts as a debt.
No. A DSCR loan reads the property’s rent against its full monthly payment, with no tax returns or pay stubs. Your credit, your assets and the appraisal are still checked.
On a DSCR loan, yes, with the owners signing a personal guarantee. A conventional investment loan is normally in your own name. Your CPA and attorney can say which suits you.
Not on a conventional investment loan, where gift money cannot be used on a rental. Plan on your own savings, or on borrowed money that is secured and documented.
Get a quote online, or call us and talk it through with a licensed loan officer.
This page is general information, not a commitment to lend. Programs, terms and eligibility depend on credit, income, property and underwriting review and are subject to change without notice.
Reviewed by Robert Shamie, CEO, NMLS #241428 · Last reviewed:
Fidelity Residential (PFN Lending Group, Inc., NMLS #103098) is a direct mortgage lender licensed in 40 states and the District of Columbia, with 26 years in business.