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27 May, 00:00

In the eyes of a lender, when financing a residence, what advantage does an investor have over owner-occupied borrowers?

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  1. 27 May, 03:44
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    1. Collateral

    2. Tax

    Explanation:

    In the eyes of a lender, when financing a residence, the advantages that an investor have over owner-occupied borrowers include the following:

    1. Collateral: The investor can use the property he is financing to erve as a collateral for the loan he is taking out, but in owner-occupied properties, the collateral for the loan is not solely on the value of the property.

    2. Tax: The interest on the loan taken by the investor is seen as a business expense and is treated as tax-deductible just like all corporate loan interests but the owner-occupied loan interests are not tax-deductible.
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