There are 2 Types of Non-Owner Occupied Investment Loans:
- Secondary Market Loans.
This is a 15, 20, or 30 year fixed rate loan for up to 10 loans. We only recommend sticking with a 15 or 20 year loan, reason being is that if you get a 30-year loan, you can only depreciate for 27 ½ years.
- In-House Loans.
Banks will do in-house loans and loan money to Investors with great credit and history from their own personal portfolio. These type of loans are the types that you'll get once you go beyond the 10 loans mentioned above or if you purchase commercial (Land or Apartment Complexes). These loans usually require 20% down payment.
Of course there are pros & cons to these types of loans. Some of the advantages of in-house loans are that they are typically less paperwork and smaller closing costs. However, the downside of these loans are that the interest rates are only locked for 3-5 years then they balloon. Oftentimes, the bank will renew the loan once it balloons and that is where most people prefer an adjustable rate mortgage (ARM).
I hope this gives you a little insight into the world of investments loans. I, of course, would be more than happy to discuss this further, just shoot me and e-mail or comment below.
The biggest piece of advice I can give you is be sure that you shop around for lenders!