Buying real estate can be a complicated process that requires knowledge of various laws as well as local ordinances. Many people in the process of purchasing real estate consult with a financial professional to make the process easier. Financing can help a real estate purchase go more smoothly, and here are 3 ways to do just that.
1. Take Out a Traditional Loan
Taking out a conventional loan is the go-to option for those who have good credit and are purchasing a home that requires little or no maintenance. These loans take into account factors such as your:
- Income
- Debt
- Assets
- Credit score
Most people who qualify for this type of Real Estate Financing make a down payment of around 10 to 20 percent of the value of the house.
2. Acquire a Portfolio Loan
Unlike traditional loans, portfolio loans involve a lender giving money to a borrower but keeping the debt on their own portfolio in order to earn interest on the loan. These loans are more available to those without great credit who might not qualify for a conventional loan. Portfolio loans are also popular with those who are buying after bankruptcy or foreclosure, those who have second mortgages and those who are planning to fix and flip the property that they purchase.
3. Get a Hard Money Loan
Hard money loans are provided by investors rather than a bank. The requirements for obtaining a hard money loan are less regulated than other loan options, making them a good option for someone needing a loan quickly. The downside is that hard money loans come with very high interest rates and can become more expensive in the long run if you do not have a solid plan to pay them back.
If you are in the market to purchase real estate, consider one of these options to finance your property.
