Investor Mortgage
Author: Terri Ewing | Date: August 29, 2008 | Filed In: Glossary
Investor Mortgage Defined
An investor mortgage is one that is used to by an investment property and is referred to in the industry as a “non-owner occupied mortgage”. An investment property is one that the borrower does not live in but uses as a rental. An investor mortgage does cost more than one where the borrower occupies the home. It costs from 1.5% to 2.5% depending on how much you put down for an investor mortgage.
Most originators do not give you a choice on how to pay the fee for an investor mortgage. They tell you the rate is higher for that type of mortgage. Then, they just increase the rate until the fee is paid without giving you the choice to pay it upfront and get a lower rate. It is always smarter to get the lowest rate possible if you are looking at a long term investment.
To qualify for an investment mortgage you can use an existing rental agreement. You can only use 75% of the rental amount to qualify. If there is no renter, you will have to get a rental agreement in place prior to closing or qualify using the entire mortgage payment.
Author: Terri Ewing
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