What is the purpose of an investment mortgage in real estate financing?

An investment mortgage is specifically designed to finance the purchase of property intended for investment purposes, such as rental properties or commercial real estate that generates income. This type of loan is often distinct from traditional home loans, which are primarily targeted at owner-occupied properties.

By using an investment mortgage, borrowers can leverage financial resources to acquire properties that have the potential to appreciate in value and provide a stream of rental income. Lenders typically evaluate investment mortgages differently, taking into account the potential income the property can generate, which affects the loan terms, interest rates, and down payment requirements.

This explanation clarifies the function of an investment mortgage within real estate financing, highlighting its role in enabling investors to build their portfolios through leveraged financing. The other options do not align with this specific purpose, as they pertain to different types of loans that serve distinct functions unrelated to investment properties.