Their is a big difference apparently when it comes to financing an investment property rather than taking out a mortgage for a home you intend to live in. Buying an investment property where you do not intend to live in may mean you are less likely to care for it or may take on higher risks with the property than the lenders are comfortable with. We all know their are bad tenants out their who may not take care of the home and have no regards or standards on keeping it clean when their lease ends. This puts the lenders in a tougher spot and the criteria for investment properties are much stricter and the interest rates are higher than they are for owner occupied homes. The amount of a down payment for this type of property depends on who the lender is (keep your options open and definitely shop around!) and what type of property this is (house, condo, apartment complex, duplex, etc.). Larger lenders who sell the loan to a government enterprise are likely to have a higher rate and may be more difficult versus the smaller less known nationwide lender who keeps the loan in their own portfolio. Another good questions to ask yourself is "do I have backup cash incase something goes awry. In the event you have no tenants in the investment property, do you have enough cash on hand that you can pay for the mortgage, taxes and insurance for at least 6 months? Most lenders require that you show accounts with at least 6 months cash on hand for all mortgages you are paying on
More tips and financing help can be found in the article below. For those that are thinking about investment properties research and do your homework to make sure you get the right loan, use the right lender and make sure you have a cash reserve to pay for the property while it is vacant.