The Secret to Making Smart Investments

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Today we have some advice for those of you interested in buying real estate as an investment. It's a perfect time to make the market work for you, but we want to share 3 things to know before financing an investment property so you can make the most of it! 

1. Have a sizable down payment: You don't need to come into an investment property with cash only, but private mortgage insurance won't cover investment properties. Because of this, you'll need to have at least 20% to put down for financing. If you can amass 25%, you may be able to qualify for a better interest rate. 
2. It helps to be a strong borrower: There are a lot of factors that go into this - such as loan-to-value ratio and other policies of the lender you're dealing with that could affect your ability to take out a loan. Typically, when you're buying an investment property, any score below 740 can start to cost you money at the same interest rate. If you own other investment properties, the bank will want to make sure you don't have any vacancies to ensure you're not dead in the water. 
3. Avoid the big banks: If your down payment isn't quite as big as it should be, or if you have other extenuating circumstances, you should go to someone who is a direct lender, who has their own money and programs. This will give you more flexibility because they have access to a wide range of loan products and can find programs for you that would not be available from the big banks.

If you're looking to finance an investment property, we highly recommend taking a look at the above tips to inform your decision making. If you would like help with the process, or if you have any real estate questions of any kind, don't hesitate to give us a call or shoot us an email. We would love to hear from you!