Residential or Commercial
The first thing to be taking in considering for Investment Property is the number of units that your building will have. Most building that are 1 to 4 units are considered as residential, while 5 or more units are considered as commercial. If the building is considered as residential, then the process is only slightly more difficult but if the building is a commercial then it becomes a lot more difficult. The mortgage would be a commercial mortgage instead of residential mortgage. With Commercial mortgage the qualifications are tougher to meet and the interest rates are often higher as well.
Owner Occupied or Non-Owner Occupied
Another component of investment property mortgage is based on whether the owner will occupy at one of the unit or not. The major difference between the two is how much of a down payment, you would be required to make.
Since 2010, Canadian are required to make at least 20% down payment on non-owner occupied investment properties.
Mortgage Default Inseruance
Depending on your financial situations for Investment Property, our lender may require you to purchase to Mortgage default insurance, as this insurance exists to minimize the risk to lenders. This rate varies based on your down payment, the premiums are also much higher if the property is a non0owner occupied.