If you’re looking to purchase an investment property in January 2023, you’ll need the right loan to get it done. Different loan types and rates are available to suit a variety of budget and financial goals—but it may be difficult to know which one is best for you. That’s why we’ve put together this guide on loans for investment property rates and terms available in January 2023.
Fixed-Rate Mortgages
If you prefer the security of knowing exactly what your monthly payments will be, a fixed-rate mortgage could be the right option for you. This type of loan has a set interest rate that will not change over the life of the loan—which can range from 10, 15, or 30 years depending on your situation. Fixed-rate mortgages are generally considered lower risk than adjustable-rate mortgages (ARMs), because they provide predictable payments over time.
Adjustable-Rate Mortgages (ARMs)
An ARM is a type of loan that offers a lower initial interest rate than a fixed rate mortgage—but that rate can change at certain intervals throughout the life of the loan. Most ARMs have an initial period where the interest rate remains fixed, followed by an adjustable period where it can increase or decrease depending on market conditions at that time. ARMs may offer more flexibility in terms of initial payments, but they also carry more risk since there is no guarantee that your payments won’t go up over time.
Interest Only Loans
An interest only loan is another option available for financing investment property purchases. With this type of loan, borrowers make monthly payments only on the interest portion of their mortgage balance during the first few years of repayment—meaning they don’t pay down any principal until after those initial years have passed. Interest only loans tend to have lower monthly payment amounts than traditional fixed or ARM mortgages—which makes them attractive to some borrowers who want to reduce their upfront costs while they build equity in their investment property over time.
No matter what type of loan you choose for your investment property purchase, it’s important to understand how different options affect both your short and long term finances so you can make an informed decision about which type is best suited for your needs and goals. We hope this guide has provided useful information about loans for investment property rates available in January 2023 so that you can find the right loan solution for your situation!
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