Buying your first home is always exciting but scary as well. It doesn’t matter if you are purchasing your home or if you are purchasing real estate as an investment. What really counts is that you know how to find the best loan or investment loan for funding your real estate that you want to buy.
The good news is that there are many different investment property loans that you can apply for when you are looking for an investment loan for purchasing your first real estate. These are a couple of the different types of loans that you can apply for when you are looking for a property.
Normal mortgage loan
This is the loan that most people know and normally apply for. The mortgage loans. This is also one of the most affordable loans that you can get when you are looking for purchasing a home or any other real estate. The only problem is that you are going to pay off for a very long time.
And, the interest rate is also really high, especially for a first-time buyer. However, more people are getting the mortgage loan approved than any other loan, when trying to apply for a loan. The only problem is that you will need to have an upfront payment.
Hard money loans
A hard money loan is a loan that isn’t as popular and known as a mortgage loan. Especially, when it comes to purchasing real estate. This is where you are lending money from individuals or from companies. You can get your money approved a lot faster than with mortgage loans.
The problem with hard money loans is that interest is really high. You can expect to pay 10% more than what you would have paid with a mortgage loan. And, this isn’t ideal to repay the loan over a long period like a mortgage. You will need to repay the loan as soon as possible if you don’t want to pay a lot of money, just on interests.
Private money loans
Not a really popular loan to get for purchasing something as expensive as a home or real estate. However, this is something that you can consider when you aren’t approved for a mortgage loan.
A private money loan is where you are lending the money from a non-professional person. Meaning, that you are lending them money in a private manner. This might be people that you know like family, friends and even co-workers. They are also asking interests, but it won’t be as much as with other loans. However, this is one of the loans that is the least recommended.
FHA loan
The FHA loan is especially for first-time buyers. This is basically the same as a mortgage loan, but this is insured by the Federal Housing Administration. And, you will only need to have a down payment of 3.5%. This is a lot less than applying for a mortgage loan.
The great thing about this type of loan is the fact that there is only a slim chance that you will be declined. Especially if you are a first-time buyer. The interest rate isn’t that high and you will be able to afford a larger property.
These are some of the types of loans you can use to purchase real estate. We all know that no one has the money to purchase real estate cash. And, therefore you need to make sure that you know what type of loans you can use to purchase your home for the first time. Making sure that you are able to afford the payments each month. Now, you will be able to decide which loan to use, a lot easier.
Our team of suitably qualified Gold Coast accountants based in Mudgeeraba and support staff is always available to respond to the day to day needs of our clients. Contact us today
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