Are you a real estate investor who wants to expand your portfolio? Do you own investment properties that need costly renovations? An investment property line of credit might be what you need to reach your real estate goals.
What Is an Investment Property Line of Credit?
An investment property line of credit, often referred to as an LOC, is a short-term financing solution that allows the owner to tap into equity on their non-owner-occupied properties. If you secure an investment property line of credit, you can obtain cash as needed. It’s almost like having a credit card. Your credit limit is your equity, and you are only responsible for finance charges on the funds you borrow.
Your Options
Investment property lines of credit ultimately fall into these two categories:
- Single Investment Property Line of Credit: This LOC works well for investors who want one line of credit attached to a single property. Many investors use a single investment property line of credit to fund repairs and renovations.
- Portfolio Line of Credit: This option is designed for investors who own multiple properties and need a large sum of money to accomplish their real estate goals. Serious investors might use this LOC to purchase additional properties.
After deciding which situation applies to you, MortgageDepot will help you explore specific programs that meet your needs.
Qualifying For an Investment Property Line of Credit
An investment property line of credit has stricter requirements compared to a home equity line of credit. Here are a few general qualifications that you can expect to see during your application process:
- Borrowers must be collecting rental income when they apply for their LOC.
- They must have owned the investment property for at least one year.
- They must have a favorable credit score.
- Borrowers need a specific amount of cash reserves which varies by lender.
Due to the risk involved, some lenders don’t offer LOCs. Fortunately, at MortgageDepot, we have access to lenders with exceptional programs for our valued clients.
Contact MortgageDepot Today!
If you need an investment property line of credit, MortgageDepot can help. We take pride in putting investors on the path to real estate success. Connect with MortgageDepot today to learn more about securing your investment property line of credit!
Contact one of our loan consultants to learn more.
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