What is an Investment Property?

1/2 Point Loan

Origination

 

An investment property is a real estate property that has been purchased with the intention of earning a return on the investment (purchase), either through rental income, the future resale of the property, or both. The most common is a Non-Owner-Occupied residential house used as a rental property. The property can be owned by an individual or a business such as an LLC. If the property is owned by a business, all owners or members of the LLC must personally guarantee the loan. 

Financing is available for commercial buildings such as office space, restaurants, warehouses, and other commercial buildings from Workmen’s Circle Credit Union (WCCU). Similar to rental homes, the property can be owned by an individual or a business such as an LLC. If the property is owned by a business, all owners or members of the LLC must personally guarantee the loan. The commercial building can be owner-occupied or non-owner occupied. Or, it can be a mix of the owner & non-owner occupied.   

The maximum loan-to-value (LTV) that WCCU will finance is 75%. If the member is purchasing a property, the maximum loan amount is 75% of the purchase price or appraisal, whichever is less. If the member is obtaining cash out, the maximum LTV is 70%. On all investment property loans, WCCU must have a 1st mortgage on the property.  

FREQUENTLY ASKED QUESTIONS


Intangible Taxes

Members of credit unions, such as WCCU, do not pay intangible taxes on their mortgage loans. This saves the members $3/dollars per thousand of their loan amount from closing costs. Why do bank customers have to pay intangible taxes on their loan amount, but credit union members do not have to pay intangible taxes? It is because credit unions are considered non-profits and are therefore tax-exempt. These savings are passed on to the member. So, if the loan amount is $200,000, the members save $600 in intangible fees versus a bank customer.

Useful Links:

Complete the Personal Financial Statement to start your investment property loan. The form will need to be printed and provided to WCCU.

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