Real estate loans for investment properties are different than real estate loans for a primary residence. In today’s market real estate lenders are being more cautious about investment property loans than many other real estate loans. Save time getting approved for your investment real estate mortgage by understanding what lenders look for.
The Big 3 Factors Lenders Consider For Investment Real Estate Loans
You will need a good credit score for investment real estate loans. If your credit score is low you may need a much larger down payment. A larger income can help offset the impact of a lower credit score.
A larger down payment will be required for any investment real estate loans. Usually a minimum of 10% will be required for investment real estate loans and many lenders will expect closer to 20% or 30%. The property, your credit profile and income all affect the down payment required for investment real estate loans. Your down payment shows lenders that you are committed to the investment property.
The income generated by the property and your personal income are major factors. A larger personal income is very positive in the eyes of most real estate lenders. Lenders also review the income generated by the investment property. An investment property with income is always better than one without income.
Being prepared is the key to approval for investment real estate loans in today’s market. Most lenders focus on real estate loans for primary residences and they consider investment real estate loans very cautiously before offering an approval. Providing lenders with the best presentation of financial, income and property facts can put you far ahead of other investment real estate loans they may be reviewing at any given time.
If you are ready to get started with an investment real estate loan please complete our pre-approval form below.