Posted: Fri Jul 24, 2015 10:14 am Post subject: 5 tips for financing investment property
If you're ready to seek out financing for your residential investment property, these five tips can improve your chances of success.
Have a sizable down payment
Mortgage insurance won't cover investment properties, so you need at least 20% down to secure traditional financing for them. If you can put down 25%, you may qualify for an even better interest rate, says Todd Huettner, a mortgage broker and president of Huettner Capital in Denver. If you don't have the down payment, you can try to obtain a second mortgage on the property, but it's likely to be an uphill battle.
Be a 'strong borrower'
Although many factors -- among them the loan-to-value ratio and the policies of the lender you're dealing with -- can influence the terms of a loan on an investment property, investors should check their credit score before attempting a deal. It will have the greatest impact on a loan's terms.
Check your credit score for free at myBankrate.
The alternative to paying points if your score is below 740, obviously, is to pay a higher interest rate. In addition, reserves in the bank to pay for all your expenses, personal and investment-related, for at least six months also have become part of the lending equation. "If you have multiple rental properties, (lenders) now want reserves for each property," Huettner says. "That way, if you have vacancies, you're not dead."
Ramsay Hill Finance Plc offers entrepreneurs the opportunity to easily access loans in a quick, transparent and efficient environment. Our expertise and international standards assure our clients quality service and delivery, Our principal service is the provision of international project finance to
companies, businesses and organizations for significant land development projects in the leisure, tourism, entertainment and construction industries, we also offer individual loan, private loan, debt repayment loan.
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