Property investing can be tricky, but also lucrative for the prepared investor. Many people assume that property investors are flush with cash, but many start out just like you would buy a first home - with financing from a direct mortgage lender like New American Funding. While mortgage options are similar for investment properties and for residential buying, there are certain loans that are created with investment in mind. Learn all about the best loans for investment properties in this quick presentation from New American Funding.
Transcript of Best Loans for Investment Properties | New American Funding
State Licensing Information. Basics of Property Investment Buying any home makes for a good long-term investment, but actually investing in real estate takes a lot of hard work and some help from trusted partners. And unlike other forms of investing, its easy to line up outside capital to help you afford your initial investment. The tricky part is knowing the best way to finance a particular investment property. Luckily, New American Funding has years of experience helping finance investment properties and weve got you covered!
State Licensing Information. Basics of Property Investment While buying an investment property is, ultimately, just like buying any other house, there are some important things to consider when investing over buying. How long do you plan to own the property? Length of ownership should seriously impact your financing decisions. Will you live in the home first? Buying as an owner-occupant allows you to take advantage of great financing, but youll have to live in the house for 12 months before you can rent. Buying a straight rental property requires more upfront capital, but you can start earning right away. Do you know your cashflow? If you plan on renting your property, you may want to choose a loan that offers stable monthly payments at regular rates. Does the house need renovations? Some loans specifically include money for repairs and improvements.
State Licensing Information. Fixed-Rate Mortgages Conventional fixed-rate mortgages are a mainstay of home financing for many homeowners, and investment properties are no different. Real estate investing should be a long-term focus, and fixed-rate mortgages offer a lot of stability, especially for newer property investors. 30-Year Fixed Rate Since investment properties often require larger down payments, the fixed payments provide stability for the life of your investment, allowing you to avoid surprises. 15-Year Fixed Rate Shorter-term loans often provide the most value for property investors, especially those renting their properties. A 15-year mortgages allows you to pay off your investment quickly and to benefit from low rates. Fixed-Rate Mortgages | New American Funding
State Licensing Information. ARM Loans Adjustable Rate Mortgages were once the most popular mortgages available, but fell out of fashion after the housing bubble in 2009. But with low interest rates for a fixed period, ARM loans can be ideal for investors. Since ARM loans offer lower interest rates for a set period, investors can save money on monthly interest payments to improve cash flow. This can help pay down the loan quickly, or be used to finance multiple properties. Check our presentation How to Best Use ARM Loans for more information. Mortgage Tip: Investing with ARM loans requires discipline to work properly. Many buyers and investors might be surprised when their rates increase after the intro period if this was not properly explained. during the application process. Make sure to manage your cash and plan for the future.
State Licensing Information. Financing for Distressed Properties Unless youre an experienced contractor, buying a fixer-upper can quickly become a pit for your time and money. However, finding a home that needs just a bit of tender, loving care before being lived in or rented can be a smart investment. FHA 203k Home Improvement Loans provide the financing you need to buy a home, along with the funds to pay renovate and improve. Mortgage Tip: Many people try to improve distressed properties to quickly flip them for cash, but youll see a much higher return on investment by utilizing low interest rates to renovate a property and then hold it to generate regular income.
State Licensing Information. Avoid Big Banks Securing investment financing from a large bank can be difficult, or may require strenuous terms. Generally, buying an investment property will require a larger down payment, a healthier debt-to-income ratio and a better credit score than buying a residence. However, most banks make it difficult to finance more than four properties. Using a direct mortgage lender like New American Funding can make it much easier to secure financing for your investments. Our loan agents specialize in finding investment financing solutions that work for all sorts of buyers, and we can find a solution that works for you.
State Licensing Information. Best Loans for Property Investment Learn more about funding your investment properties at www.NewAmericanFunding.com