How Can I Buy My First Investment Property? - For many people purchasing their first investment property can be overwhelming. You will have many mortgage options depending on what your plans are for the property. Some of the important questions to ask yourself are:
1. How long do I want to own the property?
2. Are there any improvements needed before I can flip it, or find renters?
3. How much money do I have to put down on the purchase, or for repairs and upgrades?
4. Am I financially able to make the payments if I do not sell it in the timeframe I anticipate, or cannot find renters right away?
Once you have answered these questions your mortgage consultant will be able to present you with mortgage options that address your concerns.One popular mortgage for investors is the Pay Option ARM. Generally, this loan has several payment options every month including a payment that is so low it increases your balance by deferring some of the interest. If you plan to purchase, renovate, and flip a home all within a few months then you should ask your mortgage professional if a pay option ARM is right for you.
A rehab loan is a great option for investors seeking to improve their property immediately upon purchase. A rehab loan provides the funds to purchase your home and the funds rehabbing all in one loan. There is only one application, one set of fees, one closing, and one convenient monthly payment.
The easiest way to purchase an investment home is to keep your current home and turn that into an investment property when you are ready to move or upgrade to a bigger home. This way you still have great rates and financing from your existing home loan because it was an owner occupied property when you last financed it and now you can rent the home out. You can still get the same great financing on your new home because this will be an owner occupied property. Once you have one investment property it is usually much easier to buy another. You can use the equity in one of your homes as a down payment and possibly to pay for the new home in full.
Who should I deal with for a mortgage? - You should consult with a mortgage broker if you have special needs in finding a loan. Mortgage brokers often have resources that an individual may not know about.
Mortgage brokers have an incentive to help home buyers obtain financing. They are compensated only if they see to it that the loan closes. Loan officers from the local retail banks are usually compensated by salary. Their livelihood does not depend directly on the closing of the mortgage. With what possibly the largest investment in life, many home buyers prefer to work with mortgage brokers who have a stake riding on a successful and smooth loan process.
Typically your local mortgage broker will be able to be more flexible with loan options compared to your local bank. If you have a low credit score, most banks will not be able to help you out. Many mortgage brokers specialize in helping people with less than perfect credit. Remember mortgage brokers have access to hundreds of lenders from around the country, and each of those lenders has hundreds of loan programs to help you meet you mortgage needs.
You Can Qualify to Buy a Second Home - Buying a second home may be easier than you think. The second home market is on of the fastest growing segments of the real estate market in the U.S. If youve ever thought about getting a second home, now might be a great time to speak with a mortgage professional to see if you would qualify.
There are many hot markets out there still which can not only provide for a great second home, but a great investment opportunity as well. A second home should be looked at as a place to enjoy yourself and to relax, and also as a fairly safe and possibly fast growing investment. Location is very important for a second home for investment purposes. With all of the financing options out there today you are able to finance a second home with interest rates and terms that are similar to financing a first home.
To qualify as a second home the house usually must be at 100 miles from your primary residence and located in a seaside, mountain, desert or other "resort type" of locale. The loan underwriter will want to be comfortable with the fact that the house is actually a second home, not an investment property.
Qualifying for a second home is not as hard as you might expect. Today there are many loan options including some that don't require you to disclose income. Second home loans also have 100% financing options to further reduce the amount of money to bring at closing.
There are a variety of loan programs that work well for second homes, just as there is a large variety of loan programs for primary residences. Ask your mortgage professional what loan may work best for you, and see if it is something you are interested in.
Should I buy a Duplex or single family house - There are positives and negatives to owning a duplex over a single family residence. A duplex allows you to rent out one side helping to reduce the financial burden your mortgage payment puts on you.
When qualifying for a mortgage in a Duplex, you can try and qualify as an owner occupied property if you will be living in one of the units. This may get you a loan with a lower interest rate as well as reduce the amount of downpayment if any that may be required.
If you decide to rent out one side and live in the other you will benefit from being an onsite landlord. You have an extremely lower probability of your tenants damaging your property when you are there.
While buying a duplex may make more sense with the thought that you can rent 1 unit and live in the other unit you must remember that you will need to keep it rented, to a responsible renter, to gain a benefit over a single family home. This can sometimes prove to be a tough task; that is, getting a renter in there that pays the rent on time and keeps the unit clean and in good condition. You will also be responsible for maintenance of the unit you are not living in (along with the unit you do live in too). There will be items that will need to be fixed and possibly replaced, every time a renter leaves you will most likely have to go in and clean the carpets, possibly apply a fresh coat of paint, fix anything broken, etc... So therefore, just keep in mind that many more responsibilities come up with a duplex as opposed to a single family house.
