Investment Loans

Investment Mortgages ImagesInvestment mortgages are a bigger risk to lenders than mortgages on owner-occupied properties. For two reasons: there’s no mortgage insurance possible and people fight harder to save their home than they do to save an investment property.

Investment on 1-4 unit properties can be conforming (i.e., they fit the guidelines of Fannie Mae or Freddie Mac) or non-conforming, for purchases, rate-in-term refinancing and cash-out refinancing.

Since the QM (qualified mortgage) and ATR (ability-to-repay) rules do not apply, they can be full-doc (everything is documented) or not (people can get one based on the cash-flow of the property or based on their bank statement deposits for the previous 12 or 24 months (or even 2), or the income and assets can be stated, no verifying happens.

Because they are riskier, the interest rates are higher than the interest rates for owner-occupied properties. If the income and assets are not fully documented, the interest is even higher.