Real Estate Investor Loans

If you’re seeking to invest in real estate, whether to rehab for a quick resale to keep as a rental property or to tear down and rebuild on valuable land, there are plenty of investor loan options available.

Four Types of Real Estate Investor Loans

The Fixed Rate Loan- This loan may be for you if you’re purchasing a second home and want to use it as a rental property. The interest rate will not fluctuate no matter what the economic condition. It’s especially good if you want to hold the property for a long time.

Adjustable Rate Loan (ARM) or a Balloon Rate Mortgage-

If you’re an investor looking to rehab and resell the home quickly an ARM or a balloon mortgage with their low initial interest rates might make the most sense.

Hard Money Loans- This is a non-bank cash loan that’s usually short term (12 to 18 months) and used to finance the purchase and rehab of investment real estate. With this loan, there are no income or credit qualifications. The equity in the home is the most important criteria. The interest rate is higher but you can obtain the funds very quickly compared to conventional loans.

Real Estate Investor Changes Affecting Loans

In the beginning of 2009, Fannie Mae increased the number of mortgages investors can hold from 4 to 10. 720 is the minimum FICO score and 75% is the loan to value amount that will be financed. This is subject to change at any time.

Steve Wyrostek -HomeLoans.org Expert A 20 year plus veteran of the insurance industry, Steve managed departments in the personal and commercial lines areas of major insurers. He’s familiar with how insurance—ranging from boat to workers compensation—works.