100 Percent Investment Property Loans
REM # F656
By Ilyce R. Glink
Summary: Investing in real estate? When it comes to investment property, 100 percent financing is tough to come by. Ilyce Glink discusses how to finance investment property, including a few great tips for real estate investors.
Q: I keep hearing about 95 percent or 100 percent investment property loans being available. I cannot seem to find a bank out there offering this type of loan. Is the only way to get this type of loan to use a mortgage broker? I would rather deal directly with a bank than have to go through a 3rd party.
A: Generally it’s harder to obtain a mortgage for an investment property than for your own personal residence. And if you want to put no money down, it can be extremely hard to get financing.
Many lenders will require you to put down at least 30 percent of the price for the property. Some are more lenient and will allow you to put down just 20 percent. In certain circumstances, some lenders will allow 100 percent financing, but only if the property was purchased at below market pricing and the lender is sure that upon resale the property has appreciated substantially in value.
You should check with some real estate attorneys or brokers in your area or mortgage brokers that specialize in investment properties. Any of these individuals should know of some reputable lenders for investment properties.
Finally, if the property you are buying is a four unit building or less and you will make one of the units your home, you can get a conventional owner-occupied loan from almost any lender. These loans, unlike loans for properties that are purely investments, are bought by Fannie Mae and Freddie Mac on the secondary loan market.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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