Investment Property Loans
An investment property is a purchase for which the planned use of the property is usually for rental income.
We are happy to lend on investment properties.
On account of the greater risk associated with investment loans, these loans come with higher rates, higher down payment requirements, and slightly more restrictive guidelines.
Here, below, is what changes:
Down Payment Requirements:
Loans up to $1,250,000: 20%+ Down, but loan terms improve with 25%+ down.
Loans $1,250,001-$2,000,000: 30% Down
(Note: Multi-unit properties require greater down payments, and the loan amounts tiers adjust based on number of units. Call for details.)
To acquire the same rate as a primary residence, the purchaser would typically pay an additional 2-4 points for the loan. Or, incur a higher interest rate, and the amount of rate increase would depend on the loan amount.
More restrictive guidelines:
Gifts are not allowed.
If buying a condo, and putting down less than 25%, no more than half of the unit owners may be investors. If you put down 25%+, then this requirement is waived.
The maximum amount of seller credit you may negotiate is 2% of the sales price.
This is not a guarantee to lend. Depending on credit or your experience relative to renting properties in the past, your terms and guidelines may be different than the above.