Are you interested in buying an investment property? Will this be in addition to your primary home? If so, and you are taking out a mortgage, you need to play this situation safe. If you decide to take a big risk you should realize that this could come back to haunt you in the long run. Are you willing to deal with the consequences? As you can imagine, it is best to play it safe so you can stay sane knowing that you are in a good position.
What does it mean to play it safe? First and foremost, you must have a large enough down payment (at least 20 percent in today?s economy) when taking out a mortgage on an investment property. There are a couple of reasons for this. Not only will the lender require this, but it will also put you in the driver?s seat from the first day of owning the property. It is always good to start out with equity in a home.
When shopping for a mortgage for an investment property you may notice that interest rates are a bit higher than you have come to expect. If this is your second mortgage you should expect to deal with a higher rate. That being said, you should not give in and take the first offer from the first lender. Although the mortgage rate may be higher than it would be on a primary home you can still shop around to get the best deal possible.
Taking risks is a part of life. If you are going to buy an investment property you want to minimize your risk so you can maximize your returns and potential in the long run. This starts with the mortgage you obtain. Make sure you have a large enough down payment, and that you are ready to shop around for the best lender. By taking care of these two details you will get off to a good start while playing it safe.