A Mortgage for your Investment Property?
If you already own a home and are thinking about buying an investment property you need to consider your payment options. Those who already have a mortgage will find it more difficult to get another. Banks are not stupid. They know that if push comes to shove that you will save the house you live in and let your investment property slip into foreclosure. Does this mean that you have no shot at obtaining a mortgage on another home? Of course not.
A mortgage for an investment property will more than likely have a higher interest rate. This is something you should get used to if you are going to buy more and more properties in the future. Although the rate will be higher, if you have good credit you can keep it reasonable for the most part; hope for two percentage points or better above the rate you have on your primary home.
What about the down payment? Most lenders are going to want at least 10 percent down on an investment property. And in most cases, you will probably be asked for 20 percent. If you don?t have any money to put down you will find it difficult to buy an investment property.
As you can see, you can get a mortgage for an investment property. You have to be prepared for a higher rate and more of a down payment. Do you feel comfortable working with these terms?
photo credit: woodleywonderworks
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