If you have recently decided to put some money into real estate, then you might need to take a closer look at an investment property mortgage in Victoria, BC. That type of mortgage product will allow you to buy the rental property as quickly as possible so that you can begin turning a profit right away.
A Quick Look at Rental Property Mortgages
There are many different ways to invest in real estate, and buying property that you are personally going to rent out is usually referred to as a direct investment. With that type of property, you will need to apply for a new mortgage if you already have a home loan that you are paying off. The second mortgage is going to be treated almost identical to the initial home loan that you received, but your additional debt will be taken into consideration.
Benefits of Rental Property
Passive Income: Many people are now looking for passive sources of income in order to supplement their salaries, and investing in rental property could bring in quite a bit of extra money over the years.
Diversification of Investments: Putting your hard-earned money into traditional investment vehicles can be a great option, but you want your investments to be as diverse as possible, and rental property is a great way to accomplish that.
Increased Net Worth: As you continue to pay off your rental property’s mortgage, your net worth will keep climbing. That increase in equity could help you survive a cold market or stagnant economy.
The overall requirements for rental property are slightly more rigid than the requirements for a traditional mortgage in which the applicant is going to reside in the home. The guidelines will change between lenders and how many rental units are on the property, but most lenders now require a down payment of at least 20 percent as well as an excellent credit history. If you already have quite a bit of equity in your current home and have been making your payments on time for many years, then that will improve your chances of being approved.
What to Expect
Even if you have an excellent credit history and a sizable down payment, this process will usually take slightly longer than applying for a traditional mortgage. The lenders are going to be especially meticulous when the applicant is purchasing a multi-unit piece of property. After our first consultation, you can begin the process of collecting all of the required paperwork. From there, I can help you submit the proper applications to one or more of the lenders that I work with. Once submitted, you should hear back within two or three months.
Becoming a Real Estate Investor
I believe that investing in real estate is one of the best ways to achieve financial freedom, and I want this process to be as smooth and stress-free as possible. I invite you to contact me today to schedule a no-obligation consultation where we can discuss the pros and cons of rental property mortgages.