Several legal differences apply to mortgages on income producing investments, and lender policies reflect these distinctions. Most notably, many consumer protection laws do not apply, as well as limitations on collection procedures. So long as you repay your mortgage according to schedule, these minor drawbacks should not deter you. Commercial mortgages are the preferred vehicle for many forms of investment real estate. The rules for conforming loans do not apply. Because homestead laws may be waived, or not applicable, lender policies tend to be more lax in many regards, yet more demanding in terms in interest rates and required security.

Who should use the commercial investment option? All large mortgage companies today seem to evolve into investment mortgage lenders. They welcome all investment applications. If you do not qualify under your preferred status, ask a lender for more appropriate options. If you believe your benefits are greater using any technique, first apply with a lender, and then review the terms of your approval. The investment mortgage option creates great opportunities for many borrowers who experience qualifying for conventional loans. If you don't ask, your best option may escape.