Investor Mortgage Loans — Which Mortgage Program is Right for Me?
Written on February 26, 2011 by Brooke Wardlaw
Investor Mortgage Loans
2011 will be the year of the Real Estate Investor. An estimated 20-30% of ALL HOME PURCHASES will be savvy investors securing their future via the most affordable real estate in several decades. Many of those investors will buy in cash, but others will need some form of financing to secure and to renovate their investments. Whether you are a fix and flip or a long term hold investor, we have financing programs for you. Don’t have the cash? Wondering what the financing options are? Let’s discuss a few of the best ways to finance investment properties.
Fannie Mae HomePath
I love HomePath financing! For investors this is the cheapest way for you to get in the game. Available ONLY on Fannie Mae foreclosures, the HomePath allows for investors to put as little as 10% down with NO MORTGAGE INSURANCE on single family properties. You won’t find down payments this low for investors anywhere else. It also requires NO APPRAISAL, which will not only save you money, it will save you the headache of the tedious appraisal process. However, the HomePath (for investors) is a straight purchase loan, if the house needs renovations you’ll need to fund them out of pocket. For major renovations the HomePath is not really the right product, I’d suggest the Fannie Mae HomeSTYLE.
Fannie Mae HomeStyle
The HomeStyle is the most versatile of the investor mortgage loans on the market. Unlike the HomePath, the it is available on ANY property (not just Fannie foreclosures). It also allows for investors to finance renovations in with their purchase. However, the HomeStyle has mortgage insurance. Since the mortgage insurance companies hate investors you’ll need to put 20-25% down to get a HomeStyle. For properties needing repair (the ones that offer the best deals typically) this is the product you want.
Conventional Investor Purchase
This is your standard Fannie Mae / Freddie Mac purchase loan. Since this loan will also have mortgage insurance for loan to values exceeding 80% it will also require a down payment of at least 20% down. If you purchase with this loan make sure the house is in decent shape, you’ll need an appraisal and significant property deficiencies will kill a conventional investor purchase loan.
Hard Money Loans
If you lack the credit or the time to pursue the financing options above then Hard Money may be your only option. Certainly suitable for some scenarios this is the most expensive option available. Typically carrying rates over 10% and short term only, you need to be a savvy investor with a strong fix and flip plan to make this the option you choose.
While investor financing options may be more limited than in the past, there are still plenty of solid choices available for the savvy investor. Even though financing options are not as prevalent, the real estate deals have NEVER been this abundant. Now is the time to secure your future with Real Estate!
Tired of stock market fluctuations? Want better returns? Give us a call, let us show you why REAL ESTATE is the best investment available!
Not an investor, but still want to know your renovation options? Our FHA 203K expertise is second to NONE!
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