If you are looking at purchasing an investment property, the first thing you need to understand is that buying an investment property is quite different to buying a home in which you plan to live in. The process of purchasing an investment property can be quite complex, but is made all the easier by our team at Simpler.
In this article we will look at investment properties, investment property mortgage rates, and how they work.
What is an Investment Property Mortgage?
If the home that you are planning to purchase is one that you do not plan to live in, the type of mortgage you will need is an investment property mortgage.
It is important to state this when you are looking for a loan. Many lenders do tend to see investment properties as slightly more of a risk as you don’t have as much to lose if repayments are not made. This is because you will not be living in the home.
But of course it is expected that you will still make your repayments in a timely manner as you don’t want any trouble for your tenants, and you will most likely be relying on the rent from your tenants. Having tenants also means that the terms of the loan will be quite different than if you were living in the home yourself.
At the end of the day, investment properties are usually seen as higher risk. But in most cases, this does not mean a higher interest rate than in an owner-occupied home. Then what is the major difference? Well investment properties usually require a bigger down payment. The more you can save towards this down payment the better, as it is usually around 20-40% of the property price.
There are a variety of different types of mortgage options for investment property mortgages, including floating mortgages, fixed-term mortgages, and interest only mortgages.
Finding The Best Investment Property Mortgage Rate
If you are looking to find the best investment property mortgage rate to fit your needs and your budget, it would be best not to rush into a purchase. Your best option would in fact be to chat to one of our investment property consultants here at Simpler! Our experts can offer you inside info, and professional advice, as well as the most ideal investment property mortgage rate options for you.
Contact us to learn more about our professional services! We’d love to help you find the ideal investment property for you!