Home Finance A Quick Guide to Investment Property Loans

A Quick Guide to Investment Property Loans

by Aishwarya
A Quick Guide to Investment Property Loans

Do you view real estate investing as something only the wealthy can do?

Property investments are a good idea for any everyday investor.

There are close to 44 million homes occupied by renters in the U.S. 

Even if you don’t have the money to invest in a multi-unit apartment building, you can begin with a small starter home to build your portfolio. Once you begin making money from that, you can buy your next property. 

Are you hoping to invest in property? Do you need to know more about investment property loans? Keep reading to learn all you need to know about real estate investments. 

What is an Investment Property Loan?

An investment property loan is different from a home loan for your primary residence. These loans are used to purchase second homes and investment properties. This includes residential properties with one to four units and vacation homes. 

These loans vary to meet the needs of the investor. One option for current homeowners is to use the equity from your current home to finance buying other properties. This is called Equity Financing. 

A loan officer can guide you in the right direction to the best loan for your needs. Do some research on your own to familiarize yourself with the options. 

Want to know how to get an investment property loan with 10% down? Learn more here. 

Types of Loans 

An experienced real estate agent will know about equity financing, but let’s look at the other financing options available for investing in real estate. 

Conventional Mortgage Loans

A conventional mortgage is the most common type of home loan. Banks and mortgage brokers supply these loans for real estate investment purposes. 

The rules pertaining to these loans differ from state to state, but there are some requirements that remain standard. These include a 20% down payment and a good credit score and credit history. These will determine your interest rate as well.  

Fix-and-Flip Loans 

This type of loan is short-term to give the real estate investor the money to renovate the investment property and sell it as quickly as possible. This loan is secured by the investment property. 

Hard Money Loan 

There are professional individuals and companies that lend money to people looking to invest in real estate. You can obtain this type of loan faster than a conventional mortgage loan. 

The lender in this case looks at the value of the income property to decide whether or not to grant the loan not your credit score. 

Investment Property Loans 

If you’re hoping to be a real estate investor this information about investment property loans will help you get started. Take advantage of what’s available to get your foot in the door and make real estate a way to build your wealth. 

Be sure to bookmark our site for easy access to your one-stop for all things real estate. Looking for the latest news on residential real estate, commercial real estate, buying and selling properties, investments, mortgages, dream homes, etc.? Our aim is to provide you with the most comprehensive and useful real estate information. 

You may also like