Top 5 Best Ways To Finance Investment Properties!

Top 5 Best Ways To Finance Investment Properties!

If you have a good deal to invest in real estate and looking for the best ways for financing, you are certainly at the right place. Financing investment property is about obtaining a property for short and long-term investment. It’s a good way to gain income. Investors would either acquire a property to have it leased to generate revenue or have it renovated and sell it at a higher price. Here are top 5 best options for you to finance your investment properties:

1. Traditional Bank Loans:
This is the first and most common method for financing investment properties, but you need to have a solid credit rating and be financially stable before trying to invest in properties. You can borrow money from banks, credit unions, home mortgage companies, and other financial institutions. Most of these lenders require a high credit score and a full documentation of your income and debts. You also need to pay out at least a 20% down payment. Because these complex loans requirement and a large down payment, real estate investors are less likely to default and tend to have a more secure financial standing.

2. Fix-and-Flip Loans:
A fix and flip loan is short-term loan secured by the property. Fix and flip loans work a little differently than conventional loans. It’s much easier to obtain in comparison to conventional loans. A fix and flip loan is suitable for financing investment properties if the purpose of your investment is renovating a real estate property and then putting the property for sale to earn profit. If you are sure you can turn a profits, a fix-and-flip loan is a great option for financing investment properties.

3. Home Equity Loans:
If you have significant equity in your existing property or primary residence, you can easily opt home equity loans. You can get as much as 80% of a home’s equity value in a loan to buy an investment property. The lender will give you the funds upfront, and they will be required to make a fixed payment each month. This method can be a more secure way for financing investment properties because you will have some collateral to back them up if your investment doesn’t work out.

4. Private Hard Money Loans:
This method for financing investment properties is commonly used when real estate investors believe they can raise the value of the investment property over a short period of time. Hard money lenders offer loans for flippers and real estate developers on slightly different terms than banks. They give cash for buying an investment property in exchange for a specific interest rate. These loans are the best choice for those people who don’t necessarily have great credit but require quick money to finance their investment properties.

5. Search For A Investment Partner:
If you want to invest in a real estate property, but the price range is outside of your budget, you might consider adding an equity partner to your team. Real estate partnership can be a win for both parties and is very beneficial to new real estate investors. You can use the partner’s cash for financing the entire property or use a partner to only fund the down payment. There are no set rules, but each deal requires its own examination of who makes the decisions, how profits will be split at the end, etc. However, partnerships can also cause more troubles than a single head, especially if each one of them is thinking in its own way and considering only its own gains. So make sure you do not do partnerships with just anyone who is not reliable.

The Bottom Line:
There are many different ways for financing investment properties, but you need to find the most suitable way to keep your investment property moving forward. Finding the right method of financing investment properties is key to your success, so make sure that it fits the type of program that you’re planning to invest in. For more information about financing investment properties, contact Magna Capital Group, Inc. today at (310) 734 4044 or email at info@magnaloans.com.


Top 5 Advantages Of Mortgage Refinancing

Mortgage Refinancing is a process of replacing an existing loan with a new one in order to reduce monthly payments, lower your interest rates, take cash out of your home for large purchases, or change mortgage companies. Most people refinance when they have equity on their home, which is the difference between the amount owed to the mortgage company and the worth of the home.

There are many advantages of mortgage refinancing but one of the main advantages of refinancing regardless of equity is reducing an interest rate. A lower interest rate can have a profound effect on monthly payments, potentially saving you hundreds of dollars a year.

Here are the top 5 amazing advantages of refinancing your mortgage:

  1. The first and the most useful advantage of mortgage refinancing is lower your monthly payment.
  2. The second important advantage of mortgage refinancing is shortening the tenure period of the existing mortgage loan. For example, if the tenure period of your existing mortgage loan is 30 years and it seems to you that paying the same amount each month for as long as 30 years is not possible for you, you can transfer the tenure duration of your existing mortgage from 30 years to 15 years, or even to 10 years. This will definitely ensure your future security more prominently.
  3. Mortgage refinancing provides you a chance to shift from an FRM to ARM. If you have an adjustable rate mortgage (ARM) you could lock into a fixed rate mortgage (FRM) and gain the security of knowing what your mortgage payments will be for the life of your mortgage.
  4. Another big advantage of mortgage refinancing comes with the cash-out refinancing option. You can take advantage of some of the equity you have built up in your home over the years.
  5. You can use the equity value of your home by cash out refinancing to get rid of debts. As a large mortgage is tax deductible, unlike credit cards, it becomes an extra benefit for you. By this way, you will save money and pay off your debts simultaneously.

The Bottom Line:

Mortgage refinancing is a great financial move to reduces your mortgage payment, shortens the term of your loan or helps you build equity more quickly. Refinancing your mortgage is also helpful in getting your debt under control. If you are considering refinancing your mortgage, you are advised to look at your financial situation and the market rates carefully and then consult with your most trustful mortgage loans lender to choose the best option to avail the real advantages of mortgage refinancing.

Magna Capital Group, Inc has more than 30 years experience in the financial services business. We provide hassle-free home equity loans and mortgage refinancing with lowest interest rate and flexible terms. For more information about refinancing your mortgage, Call (310) 734 4044 or Email at info@magnaloans.com or Visit www.magnaloans.com.


Recent Comments

    Although Magna Enterprises, LLC and Magna Capital Group, Inc. are referred to throughout the text of this website as Magna Group of companies, they are not affiliates, parent or subsidiary companies as both companies are separate and distinct entities. Any questions or issues regarding this disclaimer should be addressed in writing c/o Shawn Molem.