Thinking of investing in property? This guest article by The Holloway Group will show you how you can obtain funds to buy the property you want. The Holloway Group provides 30A real estate for sale listings. While this article is specifically about 30A real estate, the points can apply when you want to buy real estate in any part of the country.
Let’s take it on.
While the market conditions are still uncertain, the small improvements in the US economy in the last five years are already beginning to show some positive results. Essentially, the sector where the step-up has been fairly noticeable is real estate segment, where the low market prices are making more investors to consider purchasing properties.
However, even though the prices of real estate are highly attractive, it is necessary to mention that the days when you could get a loan quickly and easily are gone. Nonetheless, buyers can still use a few tricks to obtain the necessary funds for property investment. If you are looking for 30A real estate for sale, here are some ways in which you can fund your purchase.
You need money to get money
While mortgage insurance is required by law, in general it is not enough to secure the full real estate financing you require. If you are considering a second mortgage for this purpose, keep in mind that this method is risky. Today, most lenders are offering further financing only under special conditions. If you want to secure a financing for your future property, it is advisable to gather at least 20% of the asset’s value. According to economists, making a down payment equivalent to 25% of the property’s worth will lower the interest rates.
Smaller lenders are usually more flexible
If you are unable to gather the necessary sum for the down payment, you still have an alternative to finding financing. This is by going to small lenders. While the big banks will typically expect a larger sum, smaller lending agencies are usually more flexible on this issue. In addition, smaller lenders who operate in 30A know the market better compared to big banks. With these lenders, they would be more interested in financing you than the big banks.
Fix your credit score first, visit the bank later
When applying for loans for investment properties, the lender will analyze various factors to establish the terms of the loan that will right for them. Among the factors that affect the terms, the one that weighs the most is the credit score. Therefore, check your credit score before filling the application form.
Generally speaking, a score below 740 automatically comes with a higher interest rate. On the same note, you may be required to provide a huge down payment to benefit from the same interest rate as borrowers with high credit scores.
Owner financing no longer scares buyers away
Before the 2008 financial crisis, buyers were wary of owner financing because this allowed everyone to get a loan. This was essentially raised a red flag regarding the seller. Today, the high debts and big number of sellers have completely changed the perception on owner financing. However, if you decide to go for owner financing, it is advisable to first discuss the option with a financial advisor first.
About the Author
Patrick Armstrong works at The Holloway Group and writes about real estate finance. Armstrong helps people to find suitable investment properties in 30A, Florida and nearby areas.