Investment Property Considerations
All types of investments should be carefully considered prior to indulgence. This is especially true when it comes to investing in real estate. Prior to opting for investment property loans, there are several considerations that should be made. You should carefully assess the benefits that you will experience, as well as the risks that may be associated with the investment. Additionally, you should ask yourself the following questions:
- What type of property do I want to invest in?
- Do I want to invest on a short-term basis or a long-term basis?
- Am I ready to meet the legal and personal requirements to becoming a landlord?
- Do I have any equity in my current home that may be used to fund the investment?
- What are my short-term and long-term investment property goals?
When opting for investment property loans, it is essential that you understand that you will be required to cover the down payment and closing costs, at the minimum. Being that the property will be considered a second home for you, the minimum down payment typically comes in at 20% of the total cost of the property. It is also important to understand that most mortgage insurance companies do not cover investment properties. For more information about the loan requirements here at Somerville Bank, you may contact one of our specialists today by clicking here.
Investment Properties Incur Many Financial Responsibilities
When opting for investment property loans, it is imperative to understand that these types of loans and their associated properties often result in many additional expenses. The loans to acquire rental property often have much higher interest rates than loans for standard home purchases. Additionally, the down payment is larger and the requirements to obtain approval are much different. You may also have to pay dues for the homeowner’s association or community where the property is located, for insurance that covers natural disasters that the area is prone to, and for services to ensure that the property is legally fit to be rented.
What Types of Properties Are Typically Not Eligible?
While investment property loans may be used for various types of properties, there are certain types that may not be eligible. These may include manufactured homes, those that are identified as “time-shares”, those that are used commercially, and coops. Prior to committing to a purchase, you should consult with us here at Somerville Bank to ensure that our investment property loans cover the type of property that you have an interest in. We understand that all future property owners/managers have different goals and we work diligently to ensure that we are able to meet your needs. We can outline all of the requirements, financial obligations, and other information that you need to get one of the investment property loans that we offer.
If you have a desire to learn more about agriculture land loans and want to start the application process, you may visit us at one of our 7 locations.
These include our Ohio Locations: North Eaton, South Eaton, Somerville, Camden, Oxford, Hamilton, and the Mortgage Center in Richmond Indiana.
For more information, simply contact one of our friendly staff and we will be more than happy to assist you.