Rental Property Loans
Rental property loans are long-term financing solutions, typically used to fund the purchase of an investment property that will be rented to a tenant. These loans are at a fixed interest rate for up to 30-years.
Does a Rental Property Loan include repair costs?
Rental property loans are intended to finance the acquisition of a property, but not any necessary repairs. If the property requires construction, borrowers typically either pay out of pocket or acquire and repair the property with a fix and flip loan. After repair, refinance the property into a rental property loan.
How much cash is required?
For rental property loans, 20% of the appraised property value is recommended. Having “skin in the game” shows investors a real, vested interest in collecting rent and maintaining the property in order to make the monthly payments to the lender.
What are the loan terms?
Rental property loans can have up to a 30-year term with very attractive rates. Rates could be adjusted higher based on the unique aspects of the property as well as the borrower’s track record and credit history.
Is there a prepayment penalty?
Rental property loans are long-term financing solutions intended to remain in place for up to 30 years, but usually there are no prepayment penalties after the 3-year mark.