If you want to invest in real estate but you don’t have the cash to invest, you need to get a loan. Our Experienced Mortgage Brokers at Counsel Mortgage Group, LLC are here and are ready to help. Here are the rules to trying to get a loan in investment properties.
First you have to look at the condition of the property. Is it move-in ready or does it need repairs (holes in the walls, cabinets missing, toilet malfunction, etc.)? If it is move in ready then conventional financing will be a good option for you. You will put 20% down, however there are some lenders today who will take 15% down but that is case by case. Generally it’s 20% down (loan amounts are available up to $417,000). The interest rate on investment properties are typically around half a point or so higher than if it was a single family residence and you can do a fixed rate loan or a adjustable rate loan.
Now lets say that the property needs a re-model or you want to put a pool in. There is a program from Fannie Mae called the “HomeStyle” program where they will allow you to take those improvements and put them into the loan. It requires 25% down and you are going to have to get the final specs from the licensed contractor you’re going to be using.
All your plans need to be approved by the lender with your credit and income documentation, so when the loan closes both have been approved. The construction would start after the loan has closed.
What if you can’t qualify for a loan?
If you have bad credit, don’t have the cash in hand or you don’t have the contractor yet. There are hard money lenders or private money lenders that will lend. They will lend on the property, by analyzing the value of the property. What they are really looking for is a exit-strategy from you. They want to know that in 6 months you are going to sell the house or in 6 months those credit issued you have are going to be resolved so you can refinance and they can get their money back. They help serve people who find a great deal on a property but can’t quality for a loan. We broker to them too.
If you want to get into real estate investing start with the condition of the property. The type of loan we can get you depends on the condition of the property.
When shopping for the best mortgage broker in Arizona, you need to know the history of the company and their mortgage brokers. At Counsel Mortgage Group, LLC, founded by an experienced CPA and attorney, we have closed hundreds of loans over the years and specialize in assisting you to obtain the right loan. Check our our experienced mortgage brokers and give us a call today or contact us. We look forward to working with you!