Financing rental property.RENTAL PROPERTY Q A I am a 33-year-old female seeking to increase my wealth through real estate investing Real estate investing involves the purchase of real estate for profit. Profits are accumulated slowly by renting out properties in a cashflow method, or are generally improved and resold for a capital gain. . I have great credit but little money to put down. I do not want to take money out of my current home. I read an article where a person received 100% financing for an investment property through a first-time investor program. Where can I find these types of programs or loans? --L. Smalls Via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the Obtaining 100% financing for investment properties is not easy, because lenders see such loans as risky. In fact, since it is considered a commercial purchase, many lenders insist on 20% to 30% down and significant cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. for investment property loans. And the credit score requirements are generally higher as well--680 and above. Each lender has different criteria for investment property loans. You can obtain 100% financing for a one- to four- unit rental property from most lenders but not as a straight investment property. You would qualify under conventional owner-occupied provisions, whereby you agree to live in the building for a set period of time in exchange for a more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. loan agreement. In some cases, you'll receive an 80/20 loan, which requires a first and second mortgage loan as a way of avoiding the cost of private mortgage insurance (The first loan covers 80% of the total amount financed and the second mortgage the other 20%). --Matthew S. Scott Mail your money management questions to Ask B.E., BLACK ENTERPRISE 130 Fifth Ave AVE Avenue AVE Average AVE Alta Velocidad Espanola (train between Madrid and Seville) AVE Alta Velocidad Española (Spanish: High Speed Train) AVE Audio Video Entertainment AVE Advertising Value Equivalent ., New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , NY 10011 or send an e-mail to scottm@blackenterprise.com. |
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