If you’ve taken out a mortgage for your primary residence in the past, you’ll find similarities in the process whenever you try to finance a non-owner occupied property. With an investment loan, you’ll still need to fill out an application, verify your income and assets, and the lender will check your credit reports and scores.
Loans for investment properties are inherently more risky for lenders than standard, owner-occupied mortgages. The probability of late payments and default on rental property loans are higher. When money gets tight, real estate investment loans usually aren’t at the top of someone’s priority list.
Imagine the following scenario. You’re a homeowner, and you owe the bank a mortgage on your primary residence. You also own a rental home, and you owe a mortgage on that property as well.
Not only may it be tougher to qualify for a rental property loan than for a mortgage on a primary residence, but it’s generally more expensive too. Again, the pricing of your mortgage is directly related to the amount of risk the lender believes its taking.
Even borrowers with excellent credit scores may pay a higher interest rate on a rental property loan than they would on a traditional mortgage. How much higher? Rates can vary widely from lender to lender. It’s common to see interest rates between .5% and .875% higher on real estate investment mortgages compared with standard residential mortgages.
According to Quicken Loans, an investment property typically needs to fit into one of the following categories: Condo, House, Single-Family Unit, and Multi-Family Unit.
In general, you’ll need to stick with one to four-unit properties when you apply for a rental property loan. If you want to buy an investment property with more than four units, you might need to consider a commercial residential loan or an apartment loan as an alternative. FHA multi-family financing might also be a good fit.
Traditional loans can take several months to close. We can do it in few days.
We Are Flexibile
We allow fix and flip investors to arrange and secure funds that are not available to them through other institutions.
Competitive Loan %
We provide funds to fix and flip with investment rates that start at 9% with 0 to 2 points, and returning borrowers receive better terms.