In Texas, you can get more than one type of mortgage. The rules for these different loans favor the use of your property, adding conditions to qualify and different rates and charging policies depending on your mortgage needs and use. Understand the difference between investment-based mortgages and residential mortgages with Texas Independent Insurance, serving real estate investors in Allen, TX.
Texas Mortgages – Investment vs Residence
Residential home buyers are purchasing a property to live in, and the government has historically made this an easier purchase than that of a business property loan. Residential mortgages often have simpler terms to qualify and may have incentives such as low down payments for first-time buyers or those with military service. These loans are described as being for personal, family, or household use and created for long-term payoff. In fact, short-term reselling of a residential loan can even come with penalties depending on the plan.
The Department of Savings and Lending describes how second-home mortgages and rehab mortgages differ from standard residential mortgages. Property loans used for investment, either for resale or rental, are considered for business, commercial, or investment purposes. As such, these loans have different criteria for approval as well as frequently have higher interest rates. Unlike a long-term 30-year residential mortgage, most terms are designed for short-term loans that will be paid back upon the sale of the property.
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Whatever type of home or property loan you need, you’ll also need a comprehensive insurance policy to protect your financial investment. Understand the specific policies that can support real estate investment with a qualified agent like Texas Independent Insurance, serving Allen, TX and providing insurance to Texas mortgage investors.