If you are looking to buy an investment property, whether it’s a town home, condominium, multi-family or single-family home, there are few things you should consider.
There are extra financial responsibilities for this loan. Investment property loans normally have different qualification and approval requirements, larger down payments, and higher interest rates. You may have additional costs such as homeowners association dues, trash services, utilities, and flood insurance.
The properties eligible for investment loans may be limited. For example, some types of property such as time-shares, certain manufactured homes, bed and breakfasts and coops may not be eligible for mortgage or home equity financing. Talk to your mortgage consultant if you are considering a loan on these types of property.
If your current home has enough equity, you may be able to use it to buy additional property. Remember that if you use the equity in your current home, your home becomes the security for the new loan. Talk to your mortgage consultant for more information about home equity lines of credit.
If the investment property needs renovation and repair, ask your mortgage consultant about home equity financing options.