Information on Investment Property Loans

2007-03-08 10:33:40

( Financial )



An investment property loan is another term for a real estate property loan, which is categorized as a secured loan. An investment property loan is normally availed, so that an individual can purchase a piece of commercial or residential property such as a shopping mall, warehouse, office building, or a condominium building containing several units.

Lending companies, banks, credit unions and private brokers can grant investment property loans. In order for your investment property loan application to be approved, you need to have a good credit history, show repayment ability through rental income, or salary income and sometimes even show proof of other assets you own. The market value of the property and its potential to generate income are the key factors that influence the amount of investment property loan that will be granted to you.

When your application for an investment property loan is approved, the land title of the property is normally kept by the borrower as a form of security. The documents are only released to the borrower once the repayment plan is completed, which would be after a certain number of years. In the event that the borrower defaults in making payments after a given time frame, or a grace period the lender will have the right to foreclose on the property, and become its new owner.

Acquiring an investment property loan can allow you to apply for certain tax deductions at the end of the year.

Many lenders in the market will offer you competitive interest rates for your loan; however, in order to obtain the best interest rates it is best that you perform some form of comparative shopping. It is best that when negotiating for interest rates for your loan that you request for a fixed interest rate. This is because property interest rates change frequently. Lastly, when availing of investment property loans you should also read the terms and conditions of the loan agreement carefully before signing.


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