Getting a Property Investment Mortgage

It is difficult, if not impossible, for the vast majority of people to purchase a piece of real estate immediately out of pocket. A loan, provided by a bank or credit union, is the most common solution. Those who may be seeking to take advantage of the current housing price drop to invest in real estate, however, need to be aware that obtaining a loan for an investment property is different from obtaining one for personal use.

The economic crisis has caused previously free flowing credit lines to dry up and loan interest rates to rise. Banks and creditors are more thorough now than they have been in years as to who is approved for a loan and for what purpose. If that weren’t difficult enough, a property investment mortgage typically requires a cleaner credit history and a considerably larger down payment than a mortgage for a personal property. To those with a good record history, however, and who are sensible and diligent in doing their homework when finding out what property to obtain and what institution to solicit a loan from should have little difficulty securing it.

Even in the midst of economic instability partially caused by an overflow of credit it is possible to find fixed rate mortgages for 15 or even 30 years. If it proves otherwise, however, and obtaining a mortgage to cover the full cost is not a possibility, the investor should use their knowledge of the market and get creative. If the bank only approves a mortgage that covers 70%, the possibility of using seller financing to cover the remaining 30% exists, especially in a buyer’s market such as this one. Even if that proves more trouble than it is worth, he or she could obtain a home equity loan and use it to cover the remaining percentage.