Investment Property Loans



While a residential property would be regarded as one’s primary property, an investment property is a secondary residential property purchased with the intent to generate revenue through the future resale of the property, rental income, or both. The investment property can function as a long-term project or an intentional short-term investment. For example, In the event of flipping, the real estate is purchased, remodeled or renovated, and then sold for a net profit.


Yes. In comparison to homes purchased as the primary residence, taking out a loan for an investment property often comes with higher interest rates and a larger down payment. It can be difficult to receive a loan on an investment property, so the borrower must be prepared to put down at least 20% of the home price as a down payment and be able to prove good credit scores.


Purchasing at the right price is absolutely essential when selecting your real estate investment property. Your goal is to select a property that will likely increase in value and yield the highest profits. Since this is the most important decision you will make in the investment process, it is important to be patient and well-informed about the current market conditions and property value trends. 

We highly recommend having a professional and reputable building inspector perform a thorough inspection of the property to find any potential problems or conditions that may influence your profiting potential. It is recommended to do an in-depth inspection annually to maintain the property and remain up-to-date on the condition of your investments.

Investment properties are usually accompanied by interest rates that are notably above average. Investors should be prepared to put down at least 20 percent of the property price as a down payment on the loan and ensure that your credit remains in good standing.

Contact Lending Corner today for any interest in becoming involved with investment property or investment property loans!

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Answers to Your Questions

There are a lot of factors to consider when determining how much you can afford, but a good rule of thumb is to not let your monthly mortgage exceed 25% of your monthly take-home pay. Following this guideline will help you manage additional homeownership costs such as maintenance and repairs, while still keeping room for other financial goals like retirement and savings. There are also tons of affordability calculators you can find online, like this one!

Pre-Qualification and Pre-Approval both estimate the loan amount that you are likely to qualify for. This is an important first step in the home buying process to ensure you are looking at the right homes that fit your budget.

Pre-Qualification and Pre-Approval are often used interchangeably and can both help you stand out amongst the homebuyer competition. Both require you to supply an overview of your financial history such as your income, assets, debts, and credit score. However, most people look at pre-qualification as step one and pre-approval as step two because pre-approval requires formal documentation and verification.

The amount of time it takes to close a loan will differ from lender to lender, but a top mortgage lender should be able to close your loan within 30-45 days from application. Not having the proper documentation or having errors in your documentation may result in delays so it’s important to make sure you have all of your materials properly prepared.

Mortgage lenders will require you to provide certain documents in order to assess your ability to repay your loan. The Great Recession was due in part to borrowers not being adequately vetted for their ability to repay their loans. For this reason, the pre-approval process now requires significantly more paperwork. You will be asked to provide documentation regarding your employment and income, savings and assets, and outstanding debt.

Some of these documents include:

  • Tax returns
  • Pay stubs/W-2s
  • Bank statements
  • Credit history
  • Gift letters
  • Renting history
  • Work history

Most conventional loans require at least 5% down, but 20% is typically recommended. Mortgage companies often require borrowers to pay private mortgage insurance until they have 20% equity in the home. This additional fee is put in place to protect mortgage companies against borrowers who stop making payments on time.

Although this is standard, there are also many different loan programs that can help you purchase a home with less than 5% down. For example, some Veterans can qualify for VA loans that allow them to purchase a home with 0% down and no PMI. FHA loans can also allow first time homebuyers to purchase a home with as little as 3.5% down.

Your lender will be able to assess your financial situation and determine which programs you qualify for and which ones are best for your financial goals.


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