What type of mortgage is intended specifically for the purchase of investment properties?

The correct choice indicates a type of mortgage designed specifically for acquiring properties meant for rental income or other investment purposes. An investment property mortgage typically comes with different terms and conditions compared to residential mortgages, reflecting the added risks and complications associated with properties that are not owner-occupied.

For example, lenders often require a larger down payment for investment property mortgages and may impose higher interest rates due to the perceived risks involved. Furthermore, they may scrutinize the potential rental income and how it affects the borrower's debt-to-income ratio, focusing on the viability of the investment.

Conventional mortgages are usually aimed at primary residences and may not have the same requirements as investment property mortgages. Refinance mortgages pertain to altering the terms of existing loans rather than financing new investments directly. Home equity loans are tied to the equity in a borrower's existing home, allowing them to borrow against that equity instead of targeting investment property purchases.