Different Ways to Finance Your First Real Estate Property

As the economy shows some signs of growing by the day, more and more people are thinking of tapping into the residential real estate market. It is a very promising market especially when you buy property in a down market but unless you have an excellent credit rating or rather a reasonable amount of liquid assets, buying real estate property as the credit market stands could be more of a detriment than a springboard to your prosperity. Even when you have a flourishing credit record and some sort of financial security, at least you require some financing options that will grow your net worth. This article highlights some of the most viable finance options that you may wish to consider.  When in Greenville SC please see Greenville Mortgage Place for Financing your Property.

Private funding

There are several individuals out there who are willing and ready to provide private financing, a process which is awfully similar to mortgage lending but the process is faster compared to the conventional mortgage process. The option comes with a downside of a higher interest rate, but this should not deter you especially when you have come across the most appealing homes for sale and you need quick cash.

Cash-out refinancing

Cash-out refinancing is the simple option used when the lender makes use of an existing property that he or she owns as security to get a loan. This process is also similar to applying for a mortgage, and you can actually get up to 80% of the home’s value without encountering any serious issue. Cash-out refinancing will pay any existing debts on property, create some new mortgage and bring in the difference as cash-out.

Home equity loan

This is applicable when the owner uses an existing property to serve as security for the loan. The lender will give you all of the funds upfront, which means that you will be required to pay a fixed amount at the end of each month, which is inclusive of the principle amount as well as the profit. It is typically a mini version of the conventional mortgage.

Conventional financing

This is a financing option in which the lender uses the property that you are about to buy as the security for your loan. With this mode of payment, you will benefit from a low monthly payment because the installments are spread over a long duration of time. Even so, most of the lenders will require you to pay some amount as a down payment.

Lease option

When you have run out of options to buy your next real estate property, this becomes the last resort. Ideally, the lease option allows you to get into the house with some little money and the agreement that you will purchase the property with time. The time period provided (usually two or three years) allows you to procure some financing to buy the property.

In summary, buying any real estate property requires proper planning and adequate financing. However, your hands are not tied when it comes to financing. Provided you remain open to some of these options that are readily available, you will definitely run into a deal that will leave you comfortable.

For more great information on the home buying process visit: http://www.wikihow.com/Buy-a-House

Buying Investment Property – How To Get Easy Financing

Mortgages ColumbiaAs the economy continues to improve slowly many investors are now venturing into real estate market again and the seemingly low prices make it a good time to do so. As figures from the National Association of Realtors show, most metropolitan areas within the country are reporting lower median sale prices especially on existing single family homes. This is a trend that is likely to continue and in the process lure in many investors.

However, while prices are good you will it find it challenging to get quick and easy financing for your property. This is because the credit market has tightened making it very hard to secure loans for investment property. Investors are being scrutinized even more now than before making financing difficult but not entirely impossible. A little preparation and tenacity can however improve your chances of success and help you venture into the real estate market.

Since mortgage insurance won’t cover your investment property, have a sizable down payment. With at least 20% down payment you can secure a loan with them and if you can accumulate 25% you may even qualify for a better interest rate. Alternatively, you can obtain a second mortgage on the property if you don’t have the down payment. This will however be quite an uphill task. Besides, few lenders in the real estate market actually go for second loans on residential investment property.

Many factors notable ones being the policies of the lender you are dealing with and the loan-to-value ratio can influence the terms of a loan given towards an investment property. Therefore, you need to be a strong borrower. As an investor check your credit score before you enter into any deal. Such an aspect will greatly impact on the loan terms. If your credit score is below 740, you will incur additional costs for the same interest rate. You will now have to pay a fee to have the interest rate remain the same and if you can’t raise the fee, brace yourself to pay a higher interest rate. For Mortgage on  Commercial Property and Investment Real Estate visit http://ColumbiaMortgagePlace.com – Mortgage Financing Columbia SC

As you look to venture into the real estate market and finance your investment property, note that reserves in the bank has also become an important factor in the lending equation. Most lenders need to know whether you can pay for all your expenses investment-related or personal for at least six months after acquiring the property. Even if you own multiple rental property, lenders will still want to see the reserves for each.

A Guide to Getting Government Property Financing

Are you currently looking for the best and most affordable property financing solution? Basically, there are loads of avenues through which you can get financing. However, most of these have loopholes that can easily harm both your finances and property in the long run. It’s for these reasons that one is encouraged to opt for government agency financing, such as FHA (Federal Housing Administration). One of the key advantages of using FHA is that, in case of default payments, the risk to be incurred is quite manageable. In addition to this, the repayment rates are a lot more affordable. So, how then do you go about applying and getting FHA financing?

First, you have to make sure that you meet the set requirements. Some of the key basic requirements include:

Being of a legal age, having a valid social security number and, having a steady job. In addition to this, you must make a 3.5% down payment, your property taxes, home insurance and home payments shouldn’t exceed 31% of your gross income and, if you have ever filed for bankruptcy, you should wait till two years are over.

 

Once all of these conditions have been met, you are free to make a loan request via any of the FHA offices or via the FHA website. Unlike all the other financing avenues which are a little tedious and time consuming, this particular one is usually very easy and fast. However, one has to answer a couple of questions. In essence, the more accurate and detailed the information provided is, the faster the request will be finalized. But before this happens, the property in question has to be appraised by an appraiser who has been approved by FHA. If it meets all the requirements, then, you will be just a step away from getting the financing you are looking for.

 

Although this is quite an easy process, if you are currently under a lot of pressure, lack the basic home loan financing know-how or are in need of some help, it’s always advisable that you find someone who’s more experienced. As such, you can hire a broker to help you understand the various requirements needed during the application or, help you with the paperwork. Being highly experienced, they can help increase the chances of your application getting approved.

 

Based on all of the above basics and advantages, it’s evident that opting for government rather than private company financing is the best way out. If you live in Myrtle Beach SC – Here is a Great Place for FHA Mortgages in Myrtle Beach.

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