Why the Second Investment Property is So Much Easier to Finance

home financing

First time real estate investors find the approval process is very much the same as financing an owner occupied property. There’s a credit report checked, bank statements and assets are reviewed as well as income and employment. Yet there are some additional guidelines rental property financing require. The first and most obvious is the amount of down payment needed. Most conventional programs ask for a down payment of at least 20% while providing slightly better terms with a 25% down payment. 

This is much different compared to a primary residence where the minimum down payment for a primary residence is just 5% in most cases. The other is the interest rate on the loan. Rates for rental properties will typically be anywhere from 0.25 to 0.50% higher. But buying a subsequent rental property is much easier. Why?

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