When purchasing investment property, you could have access to a conventional home loan with similarities like the same conventional mortgage programs people use to buy their primary homes. They just cost more and are harder to get. Qualifying for a conventional investment property loan depends up on your credit-worthiness, and your down payment. Typically, loans used for a rental property require a minimum 20% down payment.  You cannot buy non owner occupied investment property with a government-backed home loan such as  FHA, VA, USDA Rural Development, or the Section 184 Native American Mortgage unless you choose a multi-unit (2-4) property and will live in one of the units.

Investment property loans require larger down payments. With using a conventional loan to buy a primary residence, you can get in with as little as 3 percent down. That goes up to at least 20 percent for investment property with a fixed loan, and up to 35 percent for a three- to four-unit property with an ARM loan.

When you finance investment property, you'll need a higher credit score. Lenders generally want to see better credit than they do for primary residence buyers.

How do I get the lowest investment property mortgage rates? First, you'll find rates on investment properties improve with larger down payments. Choosing a shorter term like 15 years compared to 30 years can also improve the rate. 

If your current primary home has enough equity, you may be able to use it to buy additional property by doing a cash out refinance for down payments or even the entire purchase. Keep in mind, though, that by using the equity in your current primary home, your home becomes the security for the new loan. Talk to a Scissortail Financial home mortgage consultant today for details about our Investment property loans.