Things You Should Know About Investment Property Financing

Our current financial crisis has led to a property fire sale as homes and buildings everywhere are being foreclosed. While this makes it an excellent time to purchase properties as investments, the drying up of credit lines has made it a mite more difficult to secure loans from banks or credit unions that are in the best interests of the investor. Investment property financing is different from financing a residential property. For one thing, it usually requires a better credit history. For another, the down payments tend to be considerably larger. However, with a decent enough credit history, proper diligent research and enough knowledge of the current market it is possible to secure a fixed rate mortgage to cover the entire cost of the property for 15 or even 30 years. Should this prove impossible, however, there are still many other ways to obtain investment property financing. investasi

In cash strapped times like these, for example, it is not uncommon for seller financing to be a possibility. Seller financing is, in essence, establishing a separate mortgage with the seller. If the bank’s mortgage only covered 50% of the cost and the seller is willing, he can carry the other 50% as a personal debt and be paid in installments to be contractually determined by himself and the investor. It is even possible, in buyer’s markets such as this one, to get seller’s financing for 100% of the cost if a bank is unwilling to offer a loan. Should seller financing prove inconvenient or impossible, other possibilities remain such as taking out a home equity loan (using other property of the investor as collateral) or even receiving legal personal loans from third parties in order to cover the down payment.