Are mortgage rates generally higher on income property than for owner occupied purchases?

Asked by C Enlow, 92508 Tue Dec 9, 2008

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Marty S, , Irvine, CA
Tue Jan 20, 2009
Yes, they normally are. Lenders consider an Investment property to be a risky purchase, and therefore they loan at higher rates to compensate for the risk.

I am a mortgage broker. If I can be of service, please let me know!

Martin Smith

Precision Funding
877-238-6324 Ext 704
877-238-6324 FAX
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Pp Bb, Agent, Pomona, CA
Tue Jan 20, 2009
Usually interest rates are about a point higher for non-owner occupied/income property. If you go above 4 units it is then considered a commercial loan & usually needs 40% down. Hope this helps.
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Luke Allison, , Asheville, NC
Tue Dec 9, 2008
Yes, mortgage rates are substantially higher now vs. owner-oc properties. Along with that, you cannot get mortgage insurance currently in any declining market on investment property thus meaning you will have to pur at least 20% down, if not more in California.

If you are interested, I have two Flagstar REOs (foreclosure properties) in Riverside county that qualify for 100% financing as owner-occupied or 90% financing for investment. Plus, the rate is only 4.99 or 5.99%, depending on which option you choose.

There is a home in Moreno Valley for $157,000 and one in Riverside for $399,900.

Call me or email me if you are interested.
Luke Allison
Flagstar Bank
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Robert Vaugh…, Agent, Riverside, CA
Tue Dec 9, 2008
If you would like to sit down with a loan manager and go over your options, please give us a call.

We are conveniently located in Corona off of Main and our loan manager is very knowledgeable and educate you on your options.

We are investor friendly and therefore we can help lower your costs as a package deal with our escrow, sales & loan divisions.

Amy & Robert Vaughan
951-963-0163 x1000

You can also go to and play with the rates scenarios yourself.
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Steve Kappre, , Gloucester County, NJ
Tue Dec 9, 2008
Rates are higher, downpayments are higher, and occasionally home owner's insurance is higher. Expect 10% down or more.
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Scott Godzyk, Agent, Manchester, NH
Tue Dec 9, 2008
Yes thre is always an increase in rates for investment property. Investment property as well can be broken down into second homes, residential 1-4 unit income property and commercial. Each category is slightly higher in interest rate and down payment required to purchase or ltv when refinancing. Hope this helps
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Vicky Chrisn…, Agent, Purcellvile, VA
Tue Dec 9, 2008
Yes, higher risk = more difficulty qualifying, higher interest rate, and higher down payment required. In our area, they are requiring something like 30% down in most cases.
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Nancy Doyle, Agent, Cape Coral, FL
Tue Dec 9, 2008
Joshua is right on, and our area is a direct example of just that. Another point to think about with income properties, is that lenders usually require more of a down payment, in most cases a minimum of 20%.
Best of Luck,
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Joshua Jarvis, Agent, Duluth, GA
Tue Dec 9, 2008

Think about it, which mortgage are you going to pay when times get tough. Your home (with your family) or the one that others are in?

That's how the bank looks at it.
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