How To Get Financing For Your Property
Whether you are buying a new home or is investing in a property, having the right financing strategy is important. In this chapter, we will share with the basics of the financing process as well the conventional financing methods in real estate.
Here are some points to remember:
After you have considered all the things mentioned above, finding the appropriate loan for your needs will be much easier. Now, let us discuss the different types of mortgages.
Fixed Rate Mortgages – the traditional loan available is a 30-year fixed rate mortgage. This means that your monthly payment will remain the same for the entire duration of the loan. This type of mortgage is great for people who like to hold a property for a very long time.
Interest-Only Mortgages – the options in this type of mortgage are offered like borrowed money without increasing the monthly payment. Since no principal is paid during the interest period, your payments will be smaller compared to the typical mortgage.
Balloon Loans – balloon loans are short-term loans. For example, you borrow money for three years and the loan is then amortized as if it was a 30-year loan. At the end of the deadline, you will owe the bank the remaining principal in one lump some – like a big balloon. This is ideal for people plans on staying in a house for only a short period of time.