How to Finance My Second Property

[Brandt Welch]

Hello BP community!

I recently purchased my first home about 8 months ago and I'm looking to buy another in the area to rent out. I had a conversation with a lender this morning and he mentioned that the underwriter for my loan app would consider this an investment property and not a secondary residence, thus forcing a higher down payment (20-25%) and higher interest rate. Another option he mentioned is that I could decided that I want to move in to the new property and instead rent out the home that I purchased last year. I'm young (26), unmarried, and without children so this option is not completely infeasible, but still seems like an awfully inconvenient solution since I just moved in less than a year ago. My question is: how do investors typically go about getting financing for that second property? Is applying for a mortgage as an investment property the way to go or are there other options anyone can suggest?

Thanks in advance!