3 Types of Rental Property Loans
Are you looking for rental property loans? If so, there are plenty of different options out there. The first thing that you want to do is sit down and draw up a list of all the different properties that you may have an interest in. Once you have listed the different properties, you can start contacting different loan lenders to see what kind of loan they have available to you.
There are many different types of rental property loan available. An investment real estate loan is the most common type of loan. An investment real estate loan is simply a loan that is secured against the purchase of real estate. An investment property loan typically consists of a first mortgage, second mortgage or even a home equity line of credit (HELOC). Any property that you use to secure one of these loans will need to be appraised by an appraiser to make sure that it is worth the amount that the borrower is borrowing.
Many of these loans are used by people who are looking to purchase residential rental property. One of the best ways to secure rental property loans is to offer a high reserve price on the property that you are buying. This is done in order to attract the highest rental income. The higher your rental income is, the more money you can expect to come out of your investment. Reserve requirements can vary but typically, you will have to pay a certain percentage of your rental income towards the interest on your loan. This percentage is typically between 10 and 15%.Look for more facts about loans at http://www.ehow.com/how_4796575_become-commercial-loan-broker.html.
Another way to get rental property loans is to offer a property as a non-owner occupied unit. In this case, you will still have to provide proof of income, but you will not be required to pay any rental income taxes or insurance on the property. However, you may have to pay fees to the lender to register your unit as a non-owner occupied unit. If you choose this option, be prepared for the fees to start off high and slowly work their way down as your investment grows. See hard money loan requirements here!
A third option for obtaining rental property loans is to seek financing through a portfolio loans company. These companies specialize in helping investors obtain loans for their entire portfolio, rather than specializing in just one type of loan. These companies will shop your portfolio to various lenders in order to find the best rate and terms available for the types of properties that you are offering to rent. Be prepared to submit several loan offers to different lenders so that you can get the best rate available.
There are also some good hard money lenders that borrowers can work with through different means. Hard money lenders often only lend to borrowers who already have a strong cash flow and stable credit history. To get a hard money loan, borrowers must often already own a large amount of property in either cash or real form. In order to qualify for a hard money loan, borrowers must provide financial documentation including income and expense statements, personal and business tax returns, and a hardship letter explaining why they are unable to make regular mortgage payments. For hard money rental property loans, hard money lenders will require the borrowers to put up at least 20% of the total cost of the property as a down payment.