Have you hired the mortgage brokers Adelaide for your primary home? Chances are that you are still expecting better rates for your second property as well. Aren’t you?
But things can be a bit different this time.
Whether you are going for an investment property or second home, you might have to pay higher rates and qualification guideline could be different and strict this time.
Given below are a few of the factors you can expect from your second home or investment property.
What Are The Rates?
Don’t expect that you are going to get the same rates that you got for your previous property. Normally, the investment rates are 0.5% – 0.75% higher than the market price. Also, for a second home, the prices are higher than the home you are living home.
- Investment Property Rates: Generally higher than your primary property rate and lower than 0.50%
- Second Home Rates: 50% to 0.75% higher than the primary
However, the rates can vary depending on your credit score, income, location, and market. If there’s a change in your financial situation than the time you first bought your home, you can expect a big margin than average.
Second Home Mortgage Rules & Rates
- Interest Rate: Lenders see more risk in your second property; therefore, charge more. But not as much as an investment property.
- Part-time Occupancy: Naturally, the lenders will expect you, or your friends or family to spend at least part of the year. Although, you are allowed to rent out space if you are no longer using it. Rules can vary from lender to lender.
- 10% more Down Payment: Any lender will want direct 10% down and if your application isn’t strong enough (low credit score or small cash reverse), you may put more than 10%.
Investment Property Mortgage Rules & Rates
- Interest Rate: Investment properties are often expensive than the second homes. Its investment rate lies from 0.5% to 0.75% higher than the primary property.
- Occupancy: You don’t need to live in the building at all if you are buying it for renting purposes.
- 15% to 25% Down Payment: You need to pay the down payment from 15% for one-unit property to 25% for two-to-four-unit of property. You may also need to pay bigger down payment depending on your application.
That’s how investment property and second home property differs in rates and rules.
No matter which type of property you are seeking, contact the best Mortgage Brokers Campbelltown.
