RealEstate Financing
Tip!
Thus when doing investment real estate financing, you might want to
run a credit check on yourself so that you can figure out what the
bankers would ask and you would have a ready reply for them. Thus a
good credit history can help you in investment real estate financing.
By Steven Gillman
This is the age of creative real
estate financing. Maybe you remember when financing meant you saved up
enough to put 20% down on a house, and then got a mortgage loan
for the other 80%? You can still do that, but there are many more
options now. Here are ten of them.
1. Second mortgage loans from
sellers. Many banks will allow you to have as little as 5% into a home
purchase, but will then only loan you 80%. The seller can take payments
on a second mortgage from you for the other 15%.
2. Manufacturer loans.
Manufactured-home companies are arranging financing with 5% or less down
for their buyers. This can be as little as $2,500 down if you already
have a lot to put the home on.
3. State government housing programs.
Most states have some sort of financing help in the form of a
loan-guarantee program or outright loans for low-income buyers.
Tip!
Successful Investment real estate financing should also come with a
property finance plan. This plan would list how much in rental you
will receive, details of the property and how much you want to borrow
from the bank.
4. VA
mortgage loans. If you have been in the armed services, have a
decent job, and can save two or three paychecks, you can probably get a
home with a VA loan.
5.
Contract for sale. Called a "land contract" and other names
depending on the part of the country you are in, this just means
that you make payments to the seller instead of a bank. It's up to
you and them to negotiate downpayment amount, interest rate, and the
term of the loan.
6. Builders gifting programs. In
some parts of the country, builders fund foundations that give you a
portion of the downpayment, so you can get into a home with as little as
3% downpayment from your own pocket. FHA and other lenders have so far
approved of or allowed this.
7. FHA mortgage loans. The Farm
Home Administration doesn't actually loan the money, but guarantees your
loan for the bank, so they can loan up to 97% of the purchase price,
depending on the particular FHA program.
8. Friend and family loans. It
may not be from charity that a brother or a friend lends you the money
to buy a home. That 7% return might look awfully good if their money is
sitting in the bank at 2%.
9. Bank no-doc loans. "No-doc"
and "low-doc" loans, meaning no or low documentation requirements, are
back, and you can find them through online banks. They are for those of
you with bad credit but 20% to 30% to put down on a home. You don't even
need a job.
10. Your credit cards. A risky
way, but if you have a low-interest credit card, you can use it to come
up with the downpayment, especially if you can pay it off soon, perhaps
with a coming tax refund. The banks generally won't allow this, but you
can combine this with seller financing.
So are there more ways to approach real
estate financing? You bet there are. These are just some ways to buy
your own home. When you start investing, you can use other techniques
for really creative real estate financing.
Steve Gillman has invested in real
estate for years. To learn more, get a free real estate investing
course, and see a photo of a beautiful house he and his wife bought for
$17,500, visit
http://www.HousesUnderFiftyThousand.com |
