Creative Home Financing For Investors
Friday, November 03, 2006
The finance property industry usually works according to the
80-20 rule. This rule usually states that for a piece of
property, you must pay 20% down and 80% on loan. Nowadays,
things have changed and there are dozens of ways to finance
your property purchase. But that is right for you?
1. Financing Your Property
With as many ways to finance your property as there are
properties to finance, you will want to carefully consider your
financing before you buy. You could go for a second mortgage,
but you could also use the equity of your home to help pay down
your principal amount. Alternatively, you could refinance and
extend your payment from 25 years to 30 years. This would give
you a much lower monthly payment at the downside of the company
making more money from you overall.
2. Investing For Less
The downsides are not limited to a higher interest rate or a
longer mortgage, however. Since the buyer doesn't meet the
standard 20 percent minimum, lenders almost always require
insurance and the fees can quickly add up.
3. Alternative Sources Of Financing
For those truly ambitious, you can find other sources of money
to finance your purchase. When considering property in a new
development, such as a planned community or new housing tract,
manufacturers will often be willing to fund a home loan for
early buyers.
4. Subject To Deals
This is a unique engagement with the seller where you never
legally assume the loan, but simply start making the payments.
This might sound confusing, but it's really quite simple. There
are lots of variations on this new way of buying property, but
it is not recommended for your first investment.
5. Low Income Programs
If you have a less than perfect credit rating or are doing
military service, you might qualify for a loan program from the
government. These are almost always limited both in supply and
have stringent requirements, but they can be a boon for those
they are intended to serve.
About The Author: For more great home financing related
articles and resources check out http://INVESTING-HQ.INFO
posted by Dennis Cheesman @ 6:48 AM,
