When it comes to finding the best mortgage for investment properties in Florida, there are two types of investors; those who are new to the game and those who are seasoned. In either case you’re going to be affected by a few of the same factors when it comes to getting the best investment property rates possible.
First of all, in order to put an offer to purchase an investment property you will need to qualify for a conventional loan. This generally means having a credit score of 640 or better and being able to make a reasonable down payment. This is because conventional loans with a bank have stricter underwriting guidelines. The term of your loan (20 year, 30 year, etc.) may vary, but your mortgage loan option will not.
You cannot use a non-conventional loan, such as an FHA loan or a VA loan, to purchase an investment property.
Since you cannot use an FHA or VA loan to purchase an investment property, you will need to factor in your potential closing costs and a down payment as part of your overall investment budget. For primary owner-occupied homes the down payment may be as low as 3%, but most banks require a 20% down payment on investment property mortgage loans. And to get the best possible investment property rates you will want to make a down payment of at least 30% instead.
Aside from these factors, you will also need to carefully consider how you would like to profit from your investment property before you decide on the mortgage terms that will work best for you. The two common forms of investing in a property are by renting it to others and by selling it. Note that the interest rates on investment properties are always higher than they are for owner occupied home financing. This is because the mortgage lender is assuming more risk, as a borrower is more likely to default on an investment property than they are on a home they live in. Because the interest rates are naturally higher, you should choose a mortgage solution that gives you the best rate based on how long you expect to be holding the property.