Real Estate Financing Without Losing It All

Real estate financing should be one of the very first things that you do in order to purchase a home, purchase land or even a commercial investment. Without funding to back up your purchase, you are simply wasting your time.

The good news is that financing your dreams can happen with low interest rates and terms that fit your needs. If you don’t have a financing company just yet, here are a few tips to help you to find the best financing option for your needs.

Before You Look For A Home…

Real estate financing should be done before you look for property, so that you can insure you have the backing to purchase the size and cost that you are after. The first step is to get a few quotes from several lenders and compare them.

Many times, this can be done right on the web, within minutes. Finding out who will offer you the lowest interest rates, the best terms and the lowest closing costs is important and this can only be done with the help of a quote comparison.

The Company That Counts

Although there are many types of real estate financing companies, not all of them are the most qualified to handle your need. It pays to invest some time in learning the history of the company and the tools that they have in place that can provide you with a secure loan.

Working with a personal lender can be helpful in getting your questions answered and helping you to address the concerns that you may have.

In a day and age when there is just too much to do and little time to do it in, consider finding your real estate financing right on the web. Lenders are competing for your business, which means that you can expect great things from them!

With lower interest rates and excellent term options, even those that have poor credit or no credit may be able to secure the home or business of their dreams.

Real Estate Finance Investment – A Great Post – Bubble Way to Make Money

Investing in banks and companies that specialize in real estate finance is not recommended in this day and age. As the mortgage collapse and financial crisis have shown, there is too much fraud going on in the industry and it is difficult to know which real estate finance investment is backed by real assets and which is just a piece of paper.

If you’re an investor looking for a high return on your next real estate finance investment, consider cutting out the middleman and doing the research and due diligence yourself. You can achieve that by buying real estate notes from home sellers at a discount, and either keeping them until maturity or reselling them at a profit.

What is a real estate note? When a home buyer can’t come up with the full purchase price for his new home, the seller can offer to accept a note for the difference. This means that the buyer promises to pay the amount — plus interest — to the seller either in installments or in full after a certain period of time. Home sellers often need cash quickly so you can approach them and offer them your services. Tell them that you are a real estate finance investment specialist and that you’re interested in buying their real estate notes.

But wait! Before you actually buy a note, you must do some research on the person that issued the note, i.e. the home buyer. Do they actually exist? What is their credit rating? Have they defaulted on a loan before? Have they burdened themselves with a lot of debt?

You can take some risks if the return you’ll make is correspondingly high, but for the most part you should play it safe and only buy notes that have a high probability of being paid back. If you lose too much money you might not be able to make another real estate finance investment.

Real Estate Financing Options

When you’re putting an offer on a piece of real estate, you want to already have your financing decisions made. There are several main types of financing available. You should do your research for your specific financial situation before you put an offer on a piece of property, so you can make sure you’re getting the best possible loan for your particular needs and financial background.

FHA or VA loans

FHA or VA loans are loans that are backed by the FHA or VA. These are loans that can be offered to first-time homebuyers and veterans with low or zero down payments. FHA and VA loans are insured for the lenders. When you apply for an FHA or VA loan, you’ll go to a traditional lender like a bank or mortgage broker and will get the loan through that organization.

If you meet certain requirements by the FHA or VA, you can get these loans that are insured by these organizations to protect the lenders from potential foreclosure. These insurance policies allow the lenders to give you an incredibly low interest rate and a minimal down payment with minimal closing costs. The goal for these programs is to put people in homes that they otherwise perhaps would not be purchasing.

Traditional Loans

Traditional loans through banks, credit unions, or mortgage brokers aren’t insured like the FHA or VA loans, so you’ll likely be paying a larger down payment (about 15 percent) and have a slightly higher interest rate. These loans are for those who want to make a sizable down payment on their homes in order to have smaller monthly payments and to have some instant collateral in their homes. If you’re seeking a traditional mortgage, shop around to find the best deal for you.

Talk with different lenders about how much of a down payment you want to make and how much of a loan you’re looking for. Shop not only for the best interest rate and monthly payment, but also look at closing costs and other fees that the lenders would be offering you. Take the time to apply for several different traditional loan situations so you can find the best deal for you.

Rent-to-Own

Owner-finance situations are also a popular way to have financing for your home. If you don’t believe you would qualify for an FHA or a VA loan and you don’t have the cash for a down payment for a traditional loan, you may want to find home owners who might be up for financing the property themselves. Owner-finance situations are gaining in popularity, as more people are investing in real estate rental property and want long-term people in their properties. In an owner-finance real estate situation, you live in the home while the owner continues to own the property. You sign an agreement with the owner that you agree to pay a monthly rental fee for a set particular number of months, after which time the property then either becomes yours or you will make a large balloon payment or obtain a loan to acquire the property at a set cost. In many owner-finance situations the person buying the home typically will pay a higher interest rate and higher monthly payments in order to one day become the owner of the property.

So you see there are some options for financing when purchasing a home and you need to do your research to determine which is the best fit for you and your financial situation.