For many homeowners, turning a property into a rental is more than an investment strategy, it’s a wealth‑building milestone. But for lenders and mortgage professionals, it often introduces new layers of complexity. Borrowers need more than financing guidance; they need clarity, confidence, and credible education to make informed decisions.
That’s where the right partnership matters. In this article, we’ll explore key readiness indicators drawn from the Finally Home! educational resource, 5 Signs You’re Ready to Become a Landlord. Help your borrowers better navigate their new role owning and managing investment properties. Are they ready?
Your borrowers are curious about rental income, but are they prepared for the realities?
As market conditions shift, many borrowers look to rental properties as a hedge, an income stream, or a way to maximize equity. But while interest is high, preparedness may not be top of mind for those seeking extra income. Borrowers may underestimate the responsibilities of being a landlord or misunderstand what investors must demonstrate for financing, especially regarding GSE requirements, risk factors, reserves, and property management expectations.
For lenders, this may result in:
- More questions about rental conversions
- Greater need for borrower education
- Increased pressure to interpret evolving GSE guidelines
- More time spent clarifying misconceptions that slow down workflows
This is where proactive education may become a valuable, competitive advantage. Setting realistic expectations for their experience early is key to helping your borrowers navigate this decision and build trust with you.
When borrowers are in the questioning phase, you may feel it in your pipeline
Without proper guidance and planning, your borrowers may:
- Overestimate expected rent or underestimate expenses
- Assume rental income automatically qualifies when used as stable income
- Be unaware of landlord responsibilities
- Struggle with budgeting for vacancies, repairs, or emergencies
- Fail to understand compliance and documentation requirements
These hurdles may create friction in your workflow, from underwriting delays to additional documentation requests to misalignment on expectations.
And when borrowers aren’t prepared?
It could reflect back on the lender, even though the root cause is insufficient borrower education.
Modern lending requires more than processing applications. It requires equipping borrowers with knowledge that strengthens loan quality, improves decision‑making, and increases long‑term success.
Empower borrowers through expert education, powered by Enact + Finally Home!
Education reduces friction. Clarity builds confidence. And knowledgeable customers make stronger financial decisions.
That’s why Enact partners with organizations like Finally Home!, whose rental-readiness framework helps borrowers evaluate whether they’re truly prepared to become landlords. Its Landlord Essentials Course is designed to guide new and even experienced landlords through the basics, all in an easy-to-follow format. Before you reach out to your Enact Sales Representative to learn more, read on for key indicators to identify whether your borrowers are ready for renting.
Below are their 5 signs of readiness, reframed through a mortgage process lens, to help you identify when education could strengthen a borrower’s path forward.
1. They're Financially Prepared for the Unexpected
Finally Home! emphasizes the importance of reserves for maintenance, repairs, and vacancies. Borrowers who understand these cost factors make smoother transitions to investment‑property financing, and reduce stress during underwriting.
How you can help:
Educate borrowers on reserve expectations, risk buffers, and long‑term sustainability. Emphasize the importance of saving and having a plan for if the worst may come.
2. They Understand the Responsibilities of Property Management
Being a landlord isn’t passive income, it’s active involvement. Borrowers must be prepared for maintenance, communication, and decisions that impact tenant experience.
How you can help:
Refer them to structured educational resources so they make informed commitments early. What are key elements your borrowers may not realize are involved in property management?
3. They’re Ready for the Time Commitment
From tenant screening to repairs, managing a rental requires consistent attention. Borrowers who understand the time investment are far more likely to succeed and less likely to encounter surprises.
How you can help:
Guide borrowers to tools and checklists that help them assess their capacity and help better navigate tenant screening. Time is money, and everyone only has 24 hours in a day. How are your borrowers planning on balancing this extra work with life?
4. They Know Their Long-Term Financial Goals
According to Finally Home!, borrowers should truly understand why they want to become landlords. Whether it's cash flow, long‑term appreciation, or equity growth, they need to lock in their goals to more efficiently manage their time and resources throughout this next step in ownership.
How you can help:
Connect the dots between MI strategies, financing options, and investment longevity. Especially with MI, is there a MI product or added benefit program option that your borrowers may not realize they qualify for? Explore these options to find the best fit and help your borrower feel more confident in their decision to become a landlord.
5. They’re Ready to Navigate Legal and Market Realities
New landlords must understand local regulations, fair housing rules, and market conditions that impact rental success.
How you can help: Serve as a trusted guide and point borrowers to credible education, while aligning their understanding with underwriting expectations. Always leverage the Freddie Mac Selling Guide and Fannie Mae Selling Guide when working on the underwriting part of the mortgage process.
How knowledgeable borrowers strengthen your business
By partnering with Enact and leveraging resources like Finally Home’s education modules, lenders experience:
- Higher‑quality applications
- Reduced underwriting friction
- More confident, better‑informed borrowers
- Stronger alignment with GSE guidelines
- Improved customer trust and long‑term satisfaction
Knowledge sharing isn’t optional in today’s market, it’s an operational advantage.
Help your borrowers become confident, prepared landlords. When they’re equipped with the right education, everyone wins. You reduce friction, they gain clarity. And together, you build stronger, more sustainable financial outcomes. Explore the full article from Finally Home! here.
More ways we at Enact can help
Want to offer the Finally Home! Landlord Education Course to your borrowers?
Reach out to your Enact Sales Representative to learn how you can incorporate Finally Home’s landlord education course into your borrower‑support strategy. It’s an easy way to strengthen loan quality, empower customers, and help more households succeed in building rental‑based wealth.
We are here to help you every step of the way during the mortgage process with Enact’s suite of tools—including Rate Express®, Underwriting Resources, and other training resources. Plus, if you’re interested in learning more about the borrower education offered by Finally Home!, explore their website and work with your Enact Sales Rep anytime you’d like to partner.
Source: Opinions expressed by Finally Home! are its alone and do not necessarily reflect the views of Enact or its management. Opinions expressed are for educational purposes only. The information in this article is not intended to constitute financial or legal advice. Always review current agency publications and consult your compliance and legal advisors.
Never miss a post by subscribing to the Enact MI Blog! We’ll send you our most up-to-date topics right into your inbox.
