Investment property loans are designed for individuals or businesses looking to purchase properties specifically for rental income or future resale.
These loans allow you to capitalize on the potential returns from real estate by acquiring single-family homes, multi-unit buildings, or commercial properties with the intention of generating passive income or selling for a profit once the property appreciates in value.
Compared to residential mortgages, investment property loans typically come with higher interest rates and stricter terms. This is due to the increased risk associated with investment properties, as they rely on rental income or resale value to secure the loan. Lenders may require a larger down payment and more extensive financial scrutiny to ensure that the investment is viable, and the borrower can manage potential vacancies or market fluctuations during the course of the loan.
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