Your Investment Home:

If you are considering an investment home loan, what you should determine first is the purpose of the investment property. After that, you should explore the different investment home loan choices available.

Figure out what you will do with the property first. You may want to flip the property, meaning fix it up and sell it for a profit. Perhaps you would like to rent or lease the home to people who need a place to live. You might want to have a vacation home where you can offer short-term rentals when you are not using it.

Now, consider your loan options. Your investment home loan may be a standard variable rate or a fixed rate. If you are going to flip, a variable rate is probably fine if the market is high and you can sell quickly. A fixed rate may mean more savings in the long run if you are purchasing the home to rent to others.

An interest only investment home loan is another option if you are refurbishing a home for quick resale. With this type of loan, you would only be responsible for interest payments for up to five years. At that time, the principal of the loan will be due.

If your primary property has equity, you may be able to borrow against the equity for your investment. Consider this option if your original mortgage is more than 50% paid off and you have significant equity.