All of the top mortgage companies today offer special lender services for investment property. And yes, second homes, vacation homes, and lots qualify as investment properties. The most successful approach for mortgage approval on investment properties begins with approval itself, and then focuses your attention on negotiating rates and terms. Down payment requirements are generally a little more stringent for investment properties. And interest rates rise slightly higher if the loan is nonconforming. Nevertheless, when seeking a non-conforming loan, options likewise expand. An Investment mortgage lender is much more likely to accept creative financing and security. For instance, alternative security, assignments of cash flow, personal guarantees, corporate guarantees, and other commercial options work well.

Why are commercial lender rates and terms different? Policies for investment mortgage lending differ from first home mortgages (homesteads) for several reasons. First, lenders believe that all individuals will fight harder to keep their home than let go of an investment if experiencing financial difficult. Also, federal repurchase preprograms and guarantees are simply not available for many lenders in many circumstances. Finally, and perhaps most importantly, investment lending experts frequently perceive vacation homes as high risk purchases if located in remote areas. Based on market demand, rural lots and nonessential dwellings, in remote areas, are far more difficult for anyone to sell.