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Can You Get a Home Equity Loan on an Investment Property?

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Learn how to tap into the equity of your investment property.

an investment property with a "for sale" sign in the front yard. the image is taken from an angle that shows the front of the house and the surrounding neighborhood.

Investment property mortgage rates are above current market rates. This is because lenders see investment properties as a greater risk than primary residences. That being said, owning an investment property can be a lucrative investment, and you may want to leverage the equity you've built up in that property to fund significant expenses. This is where a home equity loan can come in handy.

A home equity loan allows you to tap the equity in a property to obtain a one-time lump sum you can use for any purpose. If you own more than one property, you can borrow against any equity you've built up to fund a significant expense. When you take out a home equity loan, you're essentially using your property as collateral.

The short answer is yes, you can get a home equity loan on an investment property. However, it may be harder to find and more expensive than getting one on your primary residence. We recommend Figure because it is our top overall company that offers a HELOC on a paid-off house.

Home equity loans are a popular way to get money for home improvements, education expenses, or consolidate debt. This type of loan typically has a fixed interest rate and a repayment term of 10 to 30 years. You'll make monthly payments until the loan is paid off.

When you own a home, you have the opportunity to build equity, which is the value of your home, minus any loan balances you have against it. This equity can be used to take out a home equity loan. However, keep in mind that if you default on the loan, you could lose your home.

Getting a home equity line of credit (HELOC) is a lot like getting a mortgage, home equity loan, or cash-out refinance loan. The difference is that with a HELOC, you can draw on the line of credit as needed, up to your credit limit. You'll only pay interest on the amount you borrow, not the entire credit limit.

Home equity lines of credit are a convenient way to tap your home's value. We've selected the best HELOC lenders to help you find the right lender for your needs. Some lenders may offer HELOCs on investment properties, but you'll need to shop around to find the best deal.

You can get a HELOC on an investment property — a home that you don't live in at all — but it may be harder to find, more expensive, and require a higher credit score and lower loan-to-value ratio than getting a HELOC on a primary residence. You'll also need to have a significant amount of equity in the property to qualify.

In conclusion, getting a home equity loan on an investment property is possible, but it may be more challenging and expensive than getting one on your primary residence. Shop around to find the best deal and make sure you have enough equity in the property to qualify. Be sure to use the funds wisely and repay the loan on time to avoid losing your property.

home equity loaninvestment propertyhelocequitycollateralinterest raterepayment termcredit limitloan-to-value ratioshop around

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