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 Rates subject to change without notice

 Conforming Loan amounts up to $806,500 | FHA Loan Limits are specific to each Florida County
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Investment Home Mortgage Rates

Investment Home Mortgage Rates

Thinking of buying an additional property for a new source of income? That would be considered an investment home. Investment homes tend to have the highest interest rates and down payment requirements of all property types. Reserve requirements also apply to investment homes.

What Are the Advantages of Conforming Investment Home Mortgages?

  • No prepayment penalty ever
  • 30yr, 25yr, 20yr, 15yr, or 10yr
  • Up to 43% debt to income ratio

What Are the Requirements?

  • Minimum credit score 680
  • Debt to income ratio under 43%
  • 15% Minimum down payment for Single Family Properties
  • 25% Minimum down payment for Multi-Family Properties
  • You plan on collecting rent from the property. If so, you may need to submit a lease agreement that confirms the property is already occupied by a tenant.


TIP: 
Keep in mind that when buying an investment home, you may not be able to include your future rental income from the property in your conforming mortgage application.

Additional Income / Program Options for Investment Properties:


    Why are interest rates higher on investment or rental properties?

    Your interest rate will generally be higher on an investment property than on an owner-occupied home because the loan is riskier for the lender. You’re more likely to default on a loan for a home that’s not your primary residence. That’s a good reason to use our investment property mortgage rate tool to compare prevailing interest rates that you qualify for.

    In addition to paying higher investment property interest rates, it’s likely you’ll have to make a higher down payment. Conventional mortgages generally require at least 15% down on a one-unit investment property and 25% down on a two- to four-unit investment property. And loan terms are usually shorter than the typical 30-year residential mortgage. After all, it’s a business transaction, rather than a home purchase.

    Pros

    • You don’t put your primary residence at risk, as you would if you financed a home equity loan or a HELOC against it to go toward your investment property purchase.
    • You may be able to use a portion of the projected rental income from the investment property to qualify for an investment mortgage.

    Cons

    • You’ll have to make a higher down payment than you would for a primary residence. This could be as much as 25% for a multi-family property. Don’t forget to factor in closing costs and fees, too, when you’re figuring out your upfront costs.
    • Investment property interest rates are higher, and though you may be able to get a rental property mortgage with a credit score as low as 640, you’ll need a higher credit score to get the lowest possible rate.
    • Though it varies by lender, you’re likely to be required to have extensive cash reserves. This can be anywhere from four to eight months’ worth of mortgage payments, taxes, insurance and homeowners association fees. That may be calculated per property, which adds up fast if you already own other investment or rental properties.
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