Investment Property Loan
Non owner occupied loans, or commonly referred to as an investment property loan, are a great way for people looking to invest in real estate to acquire financing for their properties. Today’s real estate investors and developers rely largely on financing from conventional lenders (banks) and private lenders (commercial private money lenders) to close a deal. All too often, investors find it daunting when applying for a conventional mortgage loan from a bank, finding the process to be wrought with obstacles prior to closing. The peace of mind that comes from knowing that private capital is readily available is worth its weight in gold for some investors.
Private lenders like HML Investments provide investors with quick financing through the use of alternative financing programs. Although many factors — among them the loan-to-value ratio and the policies of the lender you’re dealing with — can influence the terms of a loan on an investment property, investors should check their credit score before attempting a deal. It will have the greatest impact on a loan’s terms. If the borrower’s credit score is in bad shape, hard money offers a way for them to still be able to purchase an investment property through the use of hard money. Hard money is a non conforming loan that is backed by a hard asset. The lender evaluates the LTV (loan to value) and usually lends depending on LTV being upwards of 70% with a down payment of at least 20%. Although interest rates will be significantly higher, hard money can be used as a bridge loan in order to receive affordable long term financing. It’s important to work with a mortgage lender who understands real estate investing and financing investment properties.
For more information about how to get an investment property loan, contact the specialists at HML Investments today to get started.