Investment Property Loan
What is an investment property loan?
To buy a second home as a real estate investment property, you’ll need a mortgage to finance the purchase, just as you did for the home you live in. However, mortgages on second homes and investment properties usually have different terms and stricter requirements. You should be prepared to:
- Put at least 20 percent down
- Have a credit score of at least 740
- Accept a higher interest rate than on a mortgage for your primary residence
Pros and Cons of Buying an Investment Property to Rent
Would-be landlords are attracted to the idea of generating rental income. But, do you really want to be a landlord? Explore the pros and cons of investing in real estate:
On the plus side, you can enjoy extra monthly income to supplement your cash flow or retirement budget. At the same time, you own an asset with a value that may rise over time, providing a nice return if you decide to sell at some point. Owning rental property can also provide tax advantages (consult with your tax advisor for specifics) and it’s a way to diversify your assets and income stream.
On the other hand, being a landlord comes with certain hassles and responsibilities. You need to invest time and money in getting the home ready to rent out, advertising, and checking references and credit to find a good tenant. There may be months when the property is vacant and you don’t receive rental income but still have to pay the mortgage. Routine maintenance and repairs will also need to be paid for or performed yourself.
Apply for an Investment Property Mortgage!
Ready to start the application process for rental property financing? Whether you are looking to buy a single family home, a home to flip, or want to get a multi-family property loan, we can help. Contact one of our home loan specialists and we can help you explore your options. You can also apply online for a mortgage.