Home Investment Made Easier – 5 Important Tips
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Article by, Allen
Home investment made easier with 5 important tips
Fact that the economy is showing some improvements even if they might be small, has actually got the investors toying with the idea of jumping onto the residential real estate bandwagon again. The low prices make it an all the more beneficial time to actually do so. Now, even though prices might be good to you, fact remains that the days of quick and easy financing have long been over. Plus there’s a really tight credit market out there which makes it all the more difficult to actually secure loans and that too for investment marketing. Now all this can be within your reach when looking to make some home investments if you incorporate some creativity and preparation.
5 Important tips on home investment
Well, since you’re looking to seek out financing and that too for residential investment property, then it’s always advisable that you’re equipped with some handy tips to make the process more enduring for you. Check them out.
- Know your financial standing: The first and foremost thing you should follow is to be careful of the factors that are influencing the terms of a loan when it comes to a residential investment property. For instance, you should make it a point to check your credit score. If it’s below 740, then it can actually begin to cost you additional money, that too for the same rate of interest. Or perhaps you might have to pay a higher rate of interest. You should also check for the kind of reserves you’ve got that’ll pay for all your expenses, both personal as well as investment related.
- Be prepared for a hefty down: Understand this for a fact right from the beginning that mortgage insurance won’t really cover for home investment properties. This is essentially the reason why you should be prepared to put down a 20 percent down payment at least. This is the best way to secure traditional financing and if you can amass more down payment, say on the lines of 25 percent, then you could even get a lower rate of interest.
- Look for owner financing: Of late the practice of seeking owner financing has become a rather acceptable one. In fact, quite a few motivated sellers who’re looking to get rid of their properties and that too soon are actually looking at owner financing in the face of the ongoing credit crunch.
- Steer clear of the big banks: Now if it so happens that your down payment isn’t quite as much as it should be or perhaps if you’re going through some other extenuating circumstances, then considering a neighborhood bank instead of a large nationwide one is a good idea. This is essentially because of the fact that smaller banks and financial institutions have a degree more flexibility involved.
- Approach the other way: When looking to get going with some good home investment and that too with a high chance of profit, then you could approach financing from a different perspective also. Say for instance you haven’t got enough saved up, then in that case you should try a different game plan like taking out money from your home equity line of credit.
Keep in mind these important tips discussed above and move along with home investment confidently enough.
So how does the every day investor take advantage of one of the greatest investment opportunities of a lifetime? Check out this FREE Video on The Individual Investors Guide to Investing in Commercial Real Estate!
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