There are 2 basic types of residential mortgage Financing: Primary residence, owner occupied, Secondary owner occupied ( vacation home), and Investment. If you are unsure, its an easy solution. Is the property your primary home or your vacation home? If not, it is investment.
Investment properties are further broken down from a financing perspective. If you own fewer than Four financed properties and are purchasing another property, this would fall into the “1 to 4 financed properties” bucket. You can finance up to 80%LTV (generally)and have many lenders available to search. If, however, you already have four or more financeed properties, you will fall to a different “bucket”. There are not nearly as many lenders who can offer financing to an individual with more than four financed properties. But they do exist. Maximum financing is usually limited to 75%LTV and there are substantial reserve requirements to be aware of.
Also note that there are unique underwriting parameters for the various types of investment properties. Single Family homes, Condos, duplexs, Triplexes, even Quadraplexes are different types of dwellings. Each one MAY restrict the financing options so always be sure and ask us how it may impact you.
Investment properties have become a very popular tool in today’s recovering real estate markets. Ask us if owning an Investment property may be a good idea for you.