The Best Lenders for Investment Property Loans: Top 5 Options

Investment property loans can be used to purchase rental properties and Airbnb's. Different loans are designed for different buyers based on income, assets and qualifications. DSCR loans are especially popular, enabling buyers to get financing based on the projects or actual income of the property. Learn about the different options for loans to buy investment property.‍

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Top Investment Property Lenders

• ‍TheLender: Conventional and DSCR financing 
• ‍Better: Online pre-approval for conventional financing
• ‍Matador: Conventional and hard money loans with waived appraisal fee
• ‍Conventus: Portfolio refinancing and hard money loans
• ‍LoanDepot: Conventional financing with hands-on loan officer

Types of Investor Financing and March Interest Rates

• Conventional: Interest rates range around 7.132% - 7.204%. These loans require a strong credit history, sufficient income, and a low debt-to-income ratio. Approval also depends on a property inspection.
• DSCR (Debt-Service Coverage Ratio): These loans now range from approximately 5.95% to 6.22%, depending on the loan amount and terms. This financing is based on the property's income, with less emphasis on the borrower's personal financial situation.
• Hard Money: Rates for these short-term loans are higher, typically ranging from 7.03% to over 9%. They are intended for property flipping or significant renovations and are priced higher due to the increased risk and shorter repayment period.
• Portfolio Refinancing: These loans have rates approximately ranging from 6.11% to 6.22% for loans under $6 million, and slightly lower for larger loans. They are used by investors with extensive property portfolios to consolidate debts and streamline finances. 

At this time rates are volatile and changing on a daily basis. These rates were solicited from partners on April 1st, 2024.

The Lender: Accurate Pre-approvals & DSCR Financing

The Lender strives to simplify the loan application process and put money into the hands of borrowers. 

TheLender customers can finance properties nationwide

Investors can get a conventional mortgage or complete a refinance at competitive rates with TheLender. They can also get a unique debt-service coverage ratio (DSCR) loan. 

DSCR financing is based on the ability of an investment to cover debt payments, so the financing is based on the income of the property. Investors that struggle to qualify because of income can use this option. Given the higher risk of this loan type, rates are 0.75% - 1.25% higher than conventional financing options.

Investors can apply online by connecting TheLender to bank accounts and tax statements for a more accurate pre-approval process. Connections take about 15-minutes and TheLender will assign a loan specialist to each borrower. 

Published TheLender reviews and the feedback from Awning advisors and investors show TheLender is a reliable lender. The company has great customer service and a sound track record of financing investor deals.

Apply Online with The Lender

Better Mortgage: Quick Conventional Mortgages

Better Mortgage, otherwise known as Better.com, launched in 2014 with headquarters in New York City’s financial district. SoftBank backs the company, and the lender has funded $14 billion in loan volume in the Q1 of 2021. Better Mortgage provides conventional financing and refinancing in 47 states and Washington D.C. The only states where Better Mortgage is not available are Hawaii, Nevada, and New Hampshire.

Investors can qualify for a conventional mortgage or refinance with Better and receive a pre-approval in a few minutes. The application takes into account credit, income, existing debt, and other factors.

To apply, investors must submit some basic identifying information and consent to a soft credit check. This is an advantage over some other lenders, since it protects the credit report from hard checks, which could reduce the score. The initial application takes three minutes, after that Better requests additional documents to complete the underwriting process. Better pairs investors with a licensed mortgage broker that works on the loan with the customer. While Better’s mortgage brokers are well-equipped, they are not only focused on a single customer, nor are they experts in real estate investment lending. 

Reviews by Better borrowers are very positive and the internal experience with Awning advisors and investors that have used the service reinforced this.

Get Pre-approved with Better

Matador: Rate Comparisons With One Call

Matador, an independent mortgage broker that partners with 100’s of lenders, was founded in 2019 by experienced mortgage professionals and is based in Houston, TX. The company can lend in Alabama, California, Georgia, Florida, Texas and other major markets.

Investors can qualify for conventional financing and hard money loans from Matador. Matador is also a great way to rate shop without submitting a huge number of applications, since the company works with multiple lenders. Costs, terms and qualifications are standard for their conventional financing, making them a worthwhile consideration for rate comparison. 

Hard money loans are short-term bridge loans secured by property. Borrower qualifications matter less and the property that is being used as collateral is more important. Real estate investors use these loans for fix-and-flip investments, but can also use them to create “cash offers” and win investments that were otherwise out of reach. The largest downside is that the loans come due in 6 to 18 months, and have interest rates of +3% to +12% over conventional financing rates. 

Investors can enter their contact information with Matador and receive a call to discuss financing options with a licensed mortgage broker. Depending on the deal, Matador can provide investors with financing pre-approval in a few hours to a few days.

Awning customers receive a waived appraisal fee of $700 from Matador. Reviews of Matador are very positive and further reinforced by the experience of our investors and advisors, who often turn to the mortgage brokers for their resourcefulness.

Apply with Matador

Conventus: Portfolio Financing & More

Conventus is a private lender started in 2015 by Keith Tamao, a former Managing Director at Goldman Sachs. The company is based in California and can lend in Alabama, California, Florida, Georgia, Texas and other states. 

Conventus offers financing, rehabbing, and refinancing solutions. The company also offers portfolio refinance options and hard money loans.

By working with a contact at Conventus, Sean, investors can receive the personal attention that is important for executing complex financing scenarios. The typical process varies, but Conventus shared that many investors purchasing a long-term rental can expect to close in 30-45 days, which is faster than some other lenders. 

Conventus is not offering any promotions to Awning investors. Reviews of Conventus are available online and are very positive. 

Schedule a Call With Conventus

LoanDepot: Personal Attention for Conventional Financing

LoanDepot was founded in 2010 and as of 2020, the company broke $100 billion in mortgage originations for the first time. It’s the second-largest non-bank mortgage loan originator in the United States and can lend nationwide.

LoanDepot is best for quick pre-approval conventional financing. Awning has a relationship with Paul Kusnierek, a hands-on loan officer, that has experience working with investment property clients.

Aside from the personal service, the rates, terms and qualifications for mortgages from LoanDepot are competitive with the market. 

LoanDepot doesn’t offer any current promotions to Awning customers. Investors can find a significant number of reviews for LoanDepot online.

Email Paul Kusnierek Directly

Conclusion

Many investors work with an Awning financing partner to finance an investment property, however, we encourage you to shop around with different lenders not on this list as well. The important thing for an investor is to get the right rate and terms. The advantage that a partner lender provides is that Awning advisors have a direct line of communication with the company and can escalate if any issues or opportunities present themselves.