Investment Property Loans
What are the Different Types of Property Ownership?
There are three types of residential property ownership: primary, secondary and investment.
Primary: A primary residence is a property that you occupy for the majority of the year, is sensibly located near your place of employment and suits the needs of the occupants. You typically need to occupy the residence within 60 days of closing on the loan and have to live at that property for at least one year after closing.
Secondary: A second home or a vacation home is a residential property that is suitable for year-round occupancy, but is only actually occupied for a portion of the year. Typically, for most second home property financing, rental income cannot be used to qualify for the loan.
Investment: An investment property is owned, but not occupied by the borrower. Rental income can be used in loan qualification.
The Differences Between Investment Properties and Other Properties
Investment property mortgages often have different requirements from typical primary or secondary home mortgages. They often require a larger down payment, have a higher interest rate, loan size requirements, and different underwriting guidelines.
Benefits of Investment Properties
It is important to weigh the risks and benefits before investing. Investment properties offer several personal and financial benefits. Property owners may choose to rent the property to provide for additional cash flow, take advantage of the tax benefits, and build their investment portfolio.
If you are interested in building a real estate investment portfolio, contact us today! Our extensive experience in securing Investment Property loans has allowed countless individuals to achieve their investment goals. Let’s get started today!