Investment Property & Second Home Loans

Investment Property & Second Home Loans Are Good For:

This loan type is ideal for buyers planning to rent out a second property, expand a real estate portfolio, or purchase a vacation home. It’s also a great fit for borrowers with strong credit who are focused on long-term property value and wealth building.

Loan Requirements

Key Qualifications

• Down Payment: Typically, a down payment of 15% to 25% is required, depending on the lender and property type.
• Credit Score: A higher credit score (usually 680 or above) is often necessary to secure favorable terms.
• Cash Reserves: Lenders may require reserves to cover six to twelve months of mortgage payments.
• Property Use: The second home must be suitable for year-round occupancy and cannot be managed by a property management company.
• Occupancy: You must occupy the second home for part of the year, and rental income cannot be used to qualify for the loan.
• Down Payment: Typically for a second home, a down payment of at least 5% is required, but this can vary by lender.

Interest Rates

Investment property loans generally have higher interest rates compared to primary residence loans. This is due to the increased risk associated with rental properties.

Benefits of Investment Property & Second Home Loans

• Income Generation: Investment Property loans enable buyers to earn rental income, which can help cover mortgage payments.
• Property Appreciation: Over time, the value of the property may increase, providing potential profit upon sale.
• Tax Benefits: Owners may qualify for various tax deductions related to property expenses.