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Owner Occupied Loan for Investment Property

By on February 1, 2018   /   Investment Property Loans, Owner Occupant Loans  
Owner Occupied Loan for Investment Property

Owner Occupied Loan for Investment Property

If you’re searching for the phrase “owner occupied loan for investment property” you’re likely looking for ways to invest and grow your earning potential.  Regularly buying homes for you to live in and then converting them to rentals as you buy new properties is a great way to grow your portfolio.

Owner Occupied Loans Advantages

Using owner occupied loans to purchase properties helps you enjoy significant savings and higher loan to values.  This gives you greater buying power and saves you thousands in interest over the course of buying numerous properties.

Lower Interest Rates

By far the biggest advantage of choosing an owner-occupied loan over a traditional investment loan is the interest rate.  Interest rates for owner occupants are generally 1% to 1.5% lower than investor loans.  On a single property that goes for $200,000 the savings could be as much as $3,000 dollars.  If your wealth strategy involves buying and then renting a large number or homes the savings can add up!

With Brad Loans the difference in interest rate between a owner occupant hard money loan and an investment property loan is even greater.  So, buying as an owner occupant can save you a mountain of money.

Higher Loan To Value

Another big advantage of an owner occupant investment loan is hard money lenders will loan a higher percentage of the value.  In many cases it can be as much as 10% difference between owner occupant loans and investment loans.  For that same $200,000 property it’s the difference of $20,000 dollars!

Lower Down Payment Requirements

Most owner occupant loans require less money down.  Investment properties frequently require up to 30% of the purchase price as a down payment.  Owner occupant loans have much lower and come in at 20% or lower.  One popular way to lower or eliminate a down payment requirement is using cross collateral to secure the loan.  By using cross collateral select lenders, like Brad Loans, can offer lenders 100% LTV and require no down payment.

Avoid Limitations On Financed Properties

By purchasing properties as an owner occupant many investors will be able to avoid limitations set in place by the Fannie Mae limit.  This regulation can make it impossible to secure loans from traditional banks and limit an investor’s ability to grow their portfolio.  Fannie Mae states that real estate investors may only have a total of 10 financed residential properties.  But if you’re buying the properties as an owner occupant and are going to live in the property, the limitation is completely meaningless.

Owner Occupant Investment Considerations

When you’re buying homes as an owner occupant with the intent of paying into it’s equity and then converting the property into a rental, there are some things to keep in mind.  Firstly lenders will need to see that you’ve got a debt-to-income ratio that is low enough to add the additional property.

Debt To Income Ratio

It’s best to always have at least 30% equity in the home you’re currently living in as an owner occupant property before considering your next real estate purchase.  Even if you’re going to convert a 2 to 4 unit property you need to ensure you have 30% equity in the property before you can use the income from rent towards your debt-to-income calculation.

Buy Low Sell High

Simply buying turn key properties leave little room for growth in value.  People make good livings doing fix and flip investments by buying homes that need reasonable repairs, fixing the problems, and selling them for a profit. For owner occupant investors who want to continue to buy and sell homes, fix and flipping as part of the investment strategy just makes sense.

Owner Occupant Investment Property Loans

If you live in the Phoenix Valley and would like to get started with growing your real estate portfolio Brad Loans can help!  Our lending service makes it easy for investors to finance new properties as owner occupants.  We can work with bad credit, lend faster, and understand the real estate investment industry with decades of local knowledge in investing, fix and flip, and much more.  Read about our loan programs by clicking here.

Call Today To Start Your Owner Occupant Loan 602-999-9499

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Investment Property Loans No Money Down

By on November 17, 2017   /   No Money Down Loans  
Investment Property Loans No Money Down

Investment Property Loans No Money Down

Are you looking for ways to get an investment property loan with no money down? Are you interested in purchasing property, but just don’t have any money for the down payment? Don’t want to have cash locked-up in the purchase of property? There’s good news, it is possible for you to purchase property and not have to be concerned with either of these issues. It is now possible for you to buy property without having any money to put down on it.

10 Ways To Get an Investment Property Loan With No Money Down:

  1. Include the down payment in with the purchase price: There are lenders out there that are willing to give you 100% financing on your purchase, they will use your credit rating and lending history for this. Getting financed 100% causes your interest rate to go up, as well as your making your payments a bit higher. Of course, this is nothing to worry about if your intentions are to resell quickly anyway, for your profit margin will not be effected very much.
  2. The down payment can be negotiated in a separate installment plan: Sometimes you can find a seller that is willing to let you make monthly payments on the down payment and this can be done through a separate installment plan through a lender.
  3. Use something besides cash for trading: You do not always have to use cash for trading, as there are sellers that will except things such as a vehicle, boat, land, jewelry, and collectible items, as well as other valuables. It is a matter of finding out what it is they are wanting or what they may be in need of. Some sellers may also be willing to except payments in trade of services, such as carpentry work, automobile mechanical work, dental work, among other things, services that can be performed over a period of time.
  4. Trade the seller one property for another: You can even find sellers that are willing to trade the property they are selling in exchange for another property. For instance, the seller may be willing to exchange their property for several small rentals. This is also a way to legally get around the capital gains involved when selling a property.
  5. Mortgage transfer: It is common during foreclosures for a homeowner to work with a buyer, and because they are in a hurry to sell they will sometimes be will to transfer the mortgage over to the buyer. This type of deal is done as a assignment of contract, with the sale being closed efficiently.
  6. Banks having Loan Assistance Programs: Check with different banks to find out which one’s are offering Loan Assistance Programs. These are programs that let buyers purchase real estate properties with little or no money for the down payment.
  7. Have an investment partner: Get someone to be your investment partner. An investment partner would put up some of the money needed for the down payment or they can put it all up, leaving you to make the payments on a monthly basis and share the profits from resale when they come in.
  8. Locate a property that has a lease with the option of buying or a rent to own: After having a lease with the option of purchasing for five years, and you hold to the agreement during this time, you can purchase it with a bank loan.
  9. Houses that are owner financed or offer a land contract: This is where you find a seller that is willing to let you make your payments directly to them, including its interest rate amount. Once you have been making payments for three to five years you should be able to have enough equity in the house to qualify for a standard bank loan, which you would use to give the seller a lump sum for the balance owed on the house.
  10. If you have property already you can use it as equity for an equity line of credit: If a property you already owned has establish equity, that can be used for a down payment towards the purchase of some more property.

Brad Loans Is a Hard Money Lender Offering No Money Down Loans

Brad Loans by eMortgage Inc can help you secure a investment property loan with no money down using hard money loans. We offer 100% Loan To Value Loans W/ No Down Payment Using Cross Collateral!

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What Is A Bridge Loan?

By on October 19, 2017   /   Blog  
What Is A Bridge Loan

What Is A Bridge Loan

If your Googling “What Is A Bridge Loan“, this post should help clarify. Here Brad Loans by eMortgage Inc explains what a bridge loan is, how it works and what it is used for.

What is a bridge loan?

A bridge loan is a temporary loan that will bridge the gape between sales price of a new home and your new mortgage, if the old home hasn’t sold yet.

The bridge loan is secured to the existing home. The funds are then used as a down payment on the new home.

A bridge loan happens to be quite popular within a certain type of real estate market. Whether or not that it is a good option will depend on various factors. The reason that a buyer will take out a bridge loan is because they want to buy another place before they sell their existing home. That may sound great, but a bridge loan does have risks.

For instance, whenever a home buyer is purchasing another home before selling their home, there are 2 ways to find the down payment for the new home which is financing through a home equity loan or a bridge loan.

It is best to wait before buying a home and selling your home first, but most think its best to locate their move in home first.

If you are certain that your existing property will sell, then it will remove fears about what happens if it doesn’t. You may want to talk to an advisor before you get a bridge loan. The main advantage of a bridge loan is to avoid a bad offer and make the move up offer more attractive to a seller.

Normally, a home equity loan is much less expensive, but a bridge loan has more benefits for certain borrowers. Additionally, most lenders will not lend a home equity loan if the home is on the market. Smart borrowers will compare the benefits between the 2 types of loans and find which one is better for their situation and plan ahead before making an offer on another home.

A big benefit for bridge loans is that it allows you to purchase a new home without worrying about selling right away.

Is the balance off? The account balance that is. Below is how much money that you should keep within your savings and checking accounts.

Get it right! In the seller market, most sellers won’t accept a contingent offer. If you are selling a home, that may mean that you can’t buy a home without contingency.

How does a bridge loan work?

Most lenders will not have set debt to income ratios or FICO minimums guidelines. Funding is actually done with an underwriting approach. This requires guidelines in long term financing that is obtained for the new home.

There are some lenders that will make a conforming loan to exclude bridge loan payments for qualifying purposes. This means that you are qualified to buy the new home by adding your existing loan payment onto the new mortgage payment. The reasons that you may be qualified on 2 payments is because:

  • For a short time, you will own 2 homes.
  • Many buyers have an existing mortgage on old home.
  • Buyer is likely to close new home purchase before selling old home.

If the new mortgage is a conforming loan, then lenders will have a bit more ways to be able to accept a much higher debt to income ratio by being able to run it through automated underwriting programs.  If the new loan is a jumbo loan, then many lenders will restrict it to a 50% debt to income ratio.

Average fee for a bridge loan

Rates will actually vary between lenders, but below is an average estimate for a bridge loan in California. The interest rate will fluctuate, but for this instance, we will use 8.5%. These types of bridge loans will not have payments for 4 months, but interest will build up and be due whenever the loan has been paid based on the sale of the old property. Below are sample fees:

  • Drawing/wire/courier fee: $75
  • Recording fee: $65
  • Notary fee: $40
  • Title policy fee: $450 or more
  • Escrow fee: $450
  • Appraisal fee: $475
  • Administration fee: $850

Additionally, there will be a loan origination fee for the bridge loan that is based on the loan amount. Each point will be equal to 1%. Below are the average fees and they will vary.

  • $150,000 – $250,000 = 1 point
  • $100,000 – $150,000 = 0.75 point
  • $25,000 – $100,000 = 0.50 point

Home Purchasing Benefits of Bridge loans

  • If there is a contingent offer to purchase, the seller has a Notice to Perform, then the purchaser may then remove any contingency and move forward with the purchase.
  • The buyer can put their home on the market immediately and buy without restrictions.
  • A bridge loan may not require a monthly payment for several months.

Home Purchasing Disadvantages of Bridge Loans

  • Buyers are often qualified by a lender to own 2 homes and most may not meet this requirement.
  • Making 2 mortgage payments plus interest on a bridge loan may cause stress
  • Bridge loans will cost much more than a home equity loan.

Bridge Loans In Arizona

If you are looking for bridge loans in Arizona, Brad Loans by eMortgage can help. We offer bridge loans, hard money loans and fix and flip loans in Phoenix, Arizona and the sourounding cities.

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