Purchasing a property has the potential to be an incredibly lucrative and low-risk investment if handled correctly. Not only is it typically considered a more stable investment, but it can also function as a source of income if rented or leased. No matter which type of property you are seeking to acquire, we are here to provide you with a convenient and mutually beneficial lending process. Below are some useful things to know about mortgages for investment properties.
Investment property loans vs. normal mortgages
When you apply for a loan in order to acquire an investment property, you’ll find that you have to pay a slightly higher interest rate and down payment than you would if this were your primary residence property. The evaluation and approval process for your loan application is more thorough and detailed than it is for a traditional mortgage. We will walk through your financial history and prospects as part of the approval process for an investment property loan.
Additional costs to your mortgage payments
There are usually a few other costs that property owners are faced with in addition to monthly mortgage payments. If you are planning on renting out your property, you may have monthly cleaning and maintenance costs. Depending upon the location of your property, you might also have fees for membership in a Homeowners Association or similar neighborhood governing body.
Financing with equity
If you have a significant amount of equity in your primary residence, this equity can be used to fund a line of credit for your new real estate purchase. Even better, the interest on this type of financing is often tax-deductible.