Why the Type of Property Can Affect Your Mortgage

When most people think about what impacts their mortgage, they focus on credit score, income, or down payment. Those are big pieces of the puzzle—but another factor that often gets overlooked is the type of property you’re buying.

Lenders view different properties with different levels of risk, and that can play a role in the options available to you for both your loan term and pricing.

1. Primary Residence vs. Second Home vs. Investment Property

A home you live in full-time is usually considered the least risky for lenders. After all, people are more likely to prioritize payments on the roof over their head. Vacation homes and investment properties, on the other hand, come with more risk since they’re not your primary shelter, which can influence loan terms.

2. Single-Family Homes vs. Condos vs. Multi-Units

Single-family homes are typically straightforward in the eyes of a lender. Condos may involve

additional layers of review—like the financial health of the HOA. Multi-unit properties can open up great opportunities for rental income, but they also bring added complexity. Each of these property types may come with different lending guidelines.

3. Unique or Non-Traditional Properties

Think manufactured homes, log cabins, or homes with unusual features. These can be wonderful places to live, but because they don’t fit into the standard property box, lenders may have specific rules about how they’re financed.

What This Means for You

The property type you choose doesn’t just affect your lifestyle—it can also influence what’s available to you in terms of loan products and repayment options. That’s why it’s so important to work with someone who can walk you through the details, explain the “why” behind the differences, and help you make the most informed decision for your goals.