Buying A House for Rental Units

by Real Estate Investor
(Unknown)

Are mortgage rates higher if I'm buying a house that's not intended to be a personal residence? I'm considering purchasing a condo as a rental investment. My lender tells me that my interest rate on the mortgage is going to be about .5% greater because I'm buying it as an investment property.

Is this standard and if so, is there any way around it?

I have no plans to reside in the rental unit. Thanks!


Buying A House For Investment Purposes


Dear Real Estate Investor,

Statistically, a greater number of investment properties experience foreclosure compared to personal residences. Therefore mortgage lenders charge a higher interest rate to offset their perceived risk.

Although buying a house for an investment carries a little higher mortgage rate, the long-term benefits can offset the higher payment. A tax professional should be able to tell you if owning real estate investment properties can save you money.

You might be surprised to know the lowest rate is not always your best mortgage rate. Little or no closing costs with a little higher interest rate could still be the best deal for your mortgage. Learn how to compare mortgage interest rates for the lowest payment.

Best Wishes As You Invest,



Your Online Mortgage Advice Friend

P.S. Go to my Best Mortgage Rate Blog, an entertaining source of mortgage information. Subscribe now to the RSS feed.

The information you obtain at this site is not, nor is it intended to be, a substitute for financial, real estate or legal advice. You should consult an attorney, accountant, lender or real estate agent, as applicable, for advice regarding your individual situation. Comments and opinions found here are not necessarily those of Get-Your-Best-Mortgage-Rate.com.

Click here to post comments.

Join in and write your own page! It's easy to do. How?
Simply click here to return to Ask Kate About Buying A House.

Grin and Bear It!

We're getting a facelift! Please bear with me! The content is identical so continue to browse. I'm working as fast as I can to finish up!

Your friend,
Kate Ford

You Can Own My Brain

Lock Answers by Kate - Learn the nitty gritty inside story of locking your mortgage rate.

Refinance Answers by Kate - Refinancing brings out opinions, for sure! Get the facts here.

Answers by Kate For Seniors - Reverse Mortgage, the unique income answer for retirees.

Home Buying Answers by Kate - Learn how to buy a house. Unusual facts to aid your home buying experience.

Credit Answers by Kate - Improving credit could change your life. Find how to get more than temporary results.

FHA and VA Answers by Kate - Clear the fog. The low down on VA and FHA loan requirements.

PMI Answers by Kate - Private mortgage insurance, friend or foe? Do you know how to get rid of it?

ARM Answers by Kate - Do you have an adjustable rate home mortgage? You can ask Kate for help.

Loan Modification Answers by Kate - Unique help for modifying your mortgage. Make sure you don't miss this.

Website Answers by Kate - Yes... Readers even ask Kate how to build a website.