Are you planning on taking a property loan? When you search for property loans, you will be flooded with a lot of options. If this is your first time opting for property loans, then you need to tread carefully. It is easy to get swayed by the offers and rates promised by companies, leading you to invest in the wrong loan with high-interest rates.
Know the Type of Loan you are looking for
When it comes to opting for investment property loans, you need to know whether you would like to go in for a commercial or residential loan. If you live in and around Bellevue, Washington, then you can contact Sammamish Mortgage to help you with your investment loan options. Getting a loan is very easy here. You can complete your profile on their website, get the loan options that you can opt for, select the one that best suits your requirements, upload your documents and submit for approval.
The basic difference between the two loans is that you can opt for residential loans if you plan on renting out your property for residential purposes. If you plan on using the property for commercial purposes, then you can go in for a commercial loan. Bear in mind that you can not opt for both types of loans simultaneously.
In some cases, you can even look at multifamily loans that are given out by banks for five or more apartment units or dwellings. If you plan on buying a property for storage or small business, you can look at Small Business Administration (SBA) loans. Here the SBA will work with traditional banks to assist small businesses with money. SBA will only act as a guarantor for these loans.
When compared with the above loan options, residential loans tend to be feasible as these are easy to liquidate during emergencies.
Go with Professional Mortgage Lenders
Every bank or financial institution has its own set of guidelines that you need to follow to avail of property loans. When you have finalized on your mortgage lender, ensure that you meet them in person and ask a few questions:
- What is the type of loans they offer?
- How many investment property-loans can they offer to one person at the same time?
- Do they have a list of active investors whom they work with?
- Do they own any rental properties?
- If yes, what type of loan would they suggest for the same?
In addition to the above questions, you might even want to enquire about the down payment and credit score criteria set by them. Most banks allow down payments from 20% to 30% depending on the type of property and loan you opt for. You also need to have a good credit score from 600 to 750 to be eligible for investment property loans. It is always better to get these issues clarified with your lender, before opting for the loan.
When you take a loan, ensure that you have enough funds to make the payments. Take time weighing your loan options, so that you get the best interest rates on your loans.