Investment Property Myths Debunked: Busting Common Mortgage Misconceptions


Investment properties can be a great way to diversify your portfolio and generate passive income. However, there are many myths and misconceptions surrounding investment properties, especially when it comes to mortgages. In this article, we will debunk some of the most common mortgage myths associated with investment properties.

Myth 1: It is impossible to get a mortgage for an investment property

One of the biggest myths is that obtaining an investment property mortgage is nearly impossible. While securing financing for an investment property may be more challenging than for a primary residence, it is certainly achievable. Many lenders offer mortgage products specifically tailored for investment properties, showing that getting an investment property mortgage is definitely possible. These loans may have higher interest rates and stricter requirements, but they provide a viable path to financing an investment property.

Myth 2: You need a high credit score to qualify for a mortgage on an investment property

Another common misconception is that you need a perfect or high credit score to be approved for a mortgage on an investment property. While having good credit certainly helps, it is not the only factor lenders consider when approving a mortgage.

Factors such as your debt-to-income ratio, income stability, and the property’s potential income all play a role in determining your eligibility for a mortgage. It is always best to speak with a lender directly to understand their specific requirements.

Myth 3: Investment properties require a large down payment

Many people assume that investment properties require a hefty down payment, which can be a major deterrent for potential investors. However, the down payment required for an investment property is often similar to that of a primary residence.

While some lenders may require a larger down payment for an investment property, there are also options available, such as FHA loans and VA loans, that offer lower down payment options.

Myth 4: You need a lot of money to invest in property

Investing in property does require some initial capital, but it doesn’t have to be a large sum of money. Many people believe that you need to be wealthy or have a significant amount of savings to invest in property, but this is not necessarily true.

There are various strategies for investing in property with limited funds, such as partnering with other investors or utilizing creative financing options. It’s important to do your research and speak with a financial advisor before making any investment decisions.

Myth 5: You can only invest in properties in your local area

Some people believe that they can only invest in properties within their own city or state, but this is another common myth. With advancements in technology and the rise of virtual communication, it is easier than ever to invest in properties outside of your local area.

In fact, investing in properties in different areas can help diversify your portfolio and potentially increase returns. It’s important to do thorough research on the market and work with a knowledgeable real estate agent when considering investments outside of your local area.


Investment properties can be an excellent addition to your investment portfolio, but it’s crucial to separate fact from fiction when it comes to mortgages. You can also check out this blog to get a guide on financing funds for your investment property so that you can make an informed decision. Remember, it’s always best to research and consult with professionals before making any investment decisions. Don’t let these common mortgage myths hold you back from exploring the potential of investment properties.