What Is The Best Investment Property Loan For You?

Check out all the Options

Looking for an investment property loan that is right for you and your investment strategy? Well, you have a lot to choose from, as long as you are financially fit. Make sure your financial house is in order and the choices for an investment property loan are yours for the asking. You have the conventional Big Bank loans (that come with the most restrictions), smaller Community Banks that are eager to lend and help develop the community and the Lending Institutions with the most varied and pliable loan options. Check them all out and choose the institution that will work with you and help you find just the right investment property loan for you.

Investment Property Lenders are could be your Best Bet

These lenders main interest, is lending money to investors like you. They usually can offer a wider range of loans with a great deal more room to work with. They don’t have all the heavy regulations that are imposed on the big banks, either by the government or by themselves. They are still very much gun-shy when it comes to risk. That is not to say that the lending companies aren’t careful who they lend to, but investing is their prime goal. If there is a way to lend you money and you have met the financial requirements, they can get creative in their lending.

What Loans are out There?

If you are a first time home buyer, either for yourself or for investment property; you can look into FHA loans and Fannie Mae. They are looking for property investors for their enormous inventory of foreclosed homes and are willing to work with you.  Fannie Mae has loans that will include money for renovations in the loan. Fannie Mae also, gives up to ten different investment property loans to a single owner, whereas many large banks, limit you to four property loans.

Distressed Property Loan

If you are investing in distressed, foreclosed or wholesale properties you could be looking at a Distressed Property Loan. This loan is short term, usually a year or less. This loan is restricted to single family dwellings and is set up to refinance after 6-12 months of seasoning (seasoning is the length of time you have had the loan). It is also a good loan if you are purchasing, fixing up and selling the property (called flipping homes).  The Conventional 15-30 year Fixed Rate loans are a good deal now, with such low interest rates. This is a great property investment loan, especially if you plan on using the home for rental property. There is also the ARM or Adjustable Rate Mortgage which starts with lower interest rates and mortgage payments and then in a few years the rates adjust to the new interest rate which could be considerably higher. This is also a good loan for home flippers.

There is Commercial Financing available called a Blanket Loan. It provides financing for several single family dwellings in one loan. Its term is usually less than 15 years and based on the financial strength of the borrower. This way it can free up cash flow for other investments. And if you are investing in property to be built; you may need to check out a Bridge Loan or a Hard Money Loan, which are short term loans to get you through until the investment project is complete. Needless to say there are many options out there. Research and find an expert advisor to guide you through the whole process. All investments are risky, but if you are prepared, have excellent advisors and knowledge of your own, you have a great shot at making your investment property pay off.