investment property mortgages, investment property refinance, investment property FHA loans, investment property loans, investment property rates, investment property lenders

American Mortgage Finance

Investment Property Mortgages

 
  Loan ApplicationLoan ProgramsCalculatorPre-ApprovalTerminologyAbout UsContact Us  
 
 

.....American Mortgage Finance:
Pennsylvania's Source for Investment Property Mortgages, Refinances, Loans

 
 

Call Toll Free:  1-866-503-7334

Many people borrow money to buy investment property, aiming to benefit from rising property values or to earn rental income on a monthly basis

Stars Stripes Bar

Mortgages for investors

Many people borrow money to buy investment properties, aiming to benefit from rising property values or to earn rental income.

If this is in your plans, you'll want to shop around to compare fees, interest rates and services just as you would if the loan was for your own home. But there are some additional things you'll need to consider which can have a big impact on your investment returns.

In this section you'll find information about:

Lending criteria for investment loans

Many lenders provide loans for residential property investments at the same interest rates and fees as their ordinary home loans. Some lenders will even lend to 95 percent of the property value. But a few lenders have lower lending limits for investors, or will lend a lower proportion of the property value if you're buying an apartment, or a residential property outside the urban areas. This just reflects the higher risk lenders are taking.

Apply Online

As with ordinary home loans, lenders will look at what you can afford to repay. For example, a lender might prefer that the interest on the loan should not be more than 75 percent of the gross rental income and 35 percent of your gross personal income.

Tax deductibility

One of the key differences between a loan for your own home and for an investment property is that the interest on a loan taken out for investment purposes is tax deductible. It doesn't matter whether the property used as security for the loan is your own home or one you rent out - it's the purpose of the loan that is important.

Apply Online

If you rent your old home out and borrow money to buy or build another home to live in, then the interest is not deductible, since the purpose of the loan isn't investment. Similarly if you borrow on your rental property to buy say a boat, the interest will not be deductible.

Some lenders and brokers have particular expertise in lending for investment.

How borrowing affects your investment return and risk

The larger the proportion of a property value you borrow, the larger the risk you face and potential returns you can earn. If you only have a little bit of equity (your own money) in a property, then increases in the property value will magnify the returns on that money.

Apply Online

Apart from falling property values, other risks you need to consider are interest rate rises, long periods when you can't find a tenant, or if you lose other income you rely on to help support the loan.

Some investors set out to make a loss on their property investment, at least in the early years. This is called "negative gearing". It occurs when the income you earn from a rental property is less than the costs you face. The loss you make can be offset against tax you pay elsewhere, for example on a salary. Investors who make a loss on a property that is negatively geared are counting on capital gain to more than offset the loss over time. They are still losing money in the short-run, however.

Whether and when to repay the loan

Many investors who want to build up a number of properties take interest-only mortgages. This helps cash flow which can be used for upgrading properties so rents can be lifted, or to provide deposits for more property purchases. If you still have a mortgage on your own home, it allows cash to go towards paying this off.

Apply Online

If you only want one or two rental properties, you expect little growth in property values where you live, or you are nearing retirement, paying off investment property loans will help you reduce risk.

Stars Stripes Bar

Home  Contact Us  Mortgage Loan Application  Refinance  Purchase  Commercial  Home Equity  Investment  Interest Only  FHA Mortgages  Glossary  About Us  Recommended Professionals  Mortgage Calculator  Privacy Policy  Security Policy  VA Mortgages  Pennsylvania  Pittsburgh


American Mortgage Finance, Inc.

Toll Free:  1-866-503-REFI

email: info@americanmortgagefinance.net

 

 
Please complete the form to get a quote within 1 hour or to speak with a  live AMF loan specialist*:

Name:
Address:
City:
State:
Zip:
Email:
Phone:
Cell:
Loan Amount Requested
Estimated
Home Value

Select Mortgage / Loan Type

Select Your Credit Profile

Home Description


Best Call Time:
Morning Afternoon
Evening


Comments:



Click

Equal Housing Lender

USDA Rural Development Mortgages

 

*American Mortgage Finance, Inc. may ask you to provide information only for reference. We do not sell private information to outsiders for any other activity.

 

NMLS ID# 18811

FHA Lender ID# 29356 0000-1

VA Lender ID: 089902-00-0

Licensed by the Pennsylvania Dept. of Banking as 21850

 

If you are in need of a Realtor, Insurance Agent, or Home Inspector, CLICK HERE to find out more information about experienced professionals who we have worked with, trust, and highly recommend.

 
  investment property mortgages, investment property refinance, investment property FHA loans, investment property loans, investment property rates, investment property lenders