One of the biggest hurdles for new investors is securing financing. You’ve probably heard about the classic 20% down payment, but what if you don’t have that much cash on hand? Good news: there are plenty of financing options out there, and a great mortgage broker can help you find the one that fits your situation.
Here are some to consider:
Conventional Mortgages
The most common route. You’ll need a good credit score and typically 20% to 25% down for an investment property. These loans offer competitive interest rates and steady, long-term financing.
FHA Loans (for House Hacking)
FHA loans are perfect for house hackers. Backed by the government, they allow down payments as low as 3.5%. You must live in one of the units for at least a year, but it’s an incredible way to get started with a multi-unit property.
Private Lenders & Hard Money Loans
Short-term loans often favored by fix-and-flippers. Private lenders are individuals, while hard money lenders are companies specializing in higher-risk loans based on the property’s value — not your credit. These come with higher interest rates but can be lifesavers when you need to close fast.
Seller Financing
Here, the seller acts as the bank, lending you money directly. Less common but powerful, especially in slower markets. It bypasses traditional banks and can offer flexible terms.
Home Equity Line of Credit (HELOC)
If you own your primary residence, you might tap into your home’s equity. A HELOC is a revolving credit line secured by your home, letting you borrow funds as needed — handy for down payments or renovations.
Don’t let a lack of capital hold you back. By exploring these options and working with savvy professionals, you can find the financing that turns your investment dreams into reality.
Ready to explore financing options tailored to you? Want some expert advice to unlock your investment potential? Reach out anytime — I’m here to guide you every step of the way.
