Investment property loans often come with higher loan limits, accommodating the purchase of more expensive or multiple properties.
01
Flexible Loan Structures
These loans can be structured as fixed-rate, adjustable-rate, or interest only, depending on the financial strategy of the investor.
02
Eligibility for Various Property Types
Can be used to finance a range of properties, including single-family homes, multi-unit buildings, and commercial real estate.
03
Stricter Underwriting Standards
Typically require a larger down payment and have stricter credit score and income requirements, reflecting the higher risk for lenders.
04
Investment Property Loan Benefits
01.
Portfolio Expansion
Provides the necessary capital to acquire or refinance properties, enabling investors to expand their real estate portfolios.
02.
Potential for Higher Returns
Investing in real estate can offer significant returns through rental income and property appreciation.
03.
Tax Advantages
Investors may benefit from tax deductions related to mortgage interest, property taxes, and depreciation.
04.
Diversification
Real estate investments can diversify an investment portfolio, potentially reducing overall risk.
Loan Program Frequently Asked Questions
What is an investment property loan?
An investment property loan finances a home you plan to rent out or use for income purposes. These loans often require higher down payments and stronger financial qualifications.
Who qualifies for an investment property loan?
Borrowers typically need higher credit scores, low debt-to-income ratios, and larger down payments. Lenders look for strong financial stability since rental income can vary.
Do investment property loans require an appraisal?
Yes, lenders require an appraisal to verify the property’s value and potential rental income. This helps confirm the loan amount and the property’s ability to support investment use.
What documents are needed for an investment property loan?
You’ll need tax returns, pay stubs, bank statements, and proof of funds for the down payment. If you already own rental properties, lenders may also ask for lease agreements and rental history.
How long does an investment property loan take to close?
These loans can take slightly longer than primary home loans, often 40 to 60 days, due to the extra review of financials and rental income.
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