An investment property loan is a type of borrowing that allows you to purchase an investment property with the intent to resell it at a later date.
Initially, you buy an investment property with the objective to earn a rental income. And, when you pay off the entire mortgage, you own the property and also earn the rental income 🙂
Investment property loans can be a great way to finance your purchase of an investment property.
The loan amount you are approved for will depend on your down payment, credit score, and other factors.
Once the loan is finalized, you can begin making repairs or updates to your home as needed.
When selling your investment property after taking out the loan, make sure to list it quickly and attract qualified buyers! Or, you can continue to earn rental income from this investment property. The choice is yours.
So, if you are interested in investing in real estate but don’t have the money to do so right away, an investment property loan may be the perfect solution for you!
Difference between Investment Property Loans and Traditional Property Loans
The first and the main difference between investment property loans and traditional property loans is the basic amount or asset that you require for eligibility.
This means that the initial amount or asset that you require for investment property is higher. This initial amount can be around 20% of the property value.
Whereas in the case of a traditional home loan, you have to pay around 3% to 5% as the down payment.
Depending on the lender, the initial amount that you pay for an investment property loan can be lowered and your initial burden can be reduced.
Investment Property Loans Types
There are many types of investment property loans available, so it is important to select the one that best suits your needs.
Before making a decision, make sure you have a solid credit score as this will affect your borrowing rate.
Once you have selected a loan, find a mortgage broker who can help guide you through the process.
There are many types of investment property loans available, so it’s important to research the terms and conditions carefully.
Don’t forget to ask your mortgage broker about any discounts or financing schemes that might be available to you. Good luck!