[Guest Blog by Selena Cowell.]
Are you an investor and looking for a lender? Then you should know it for a fact that mortgages are marketed by different lenders. You can also have doubts regarding the need to use a specific mortgage lender. Again, there are other concerns too like whether or not you’re an investor with bad credit. If you’re one, then you definitely need to be extra careful so that things don’t turn out to be difficult. It’s true that there’s no way really by which you can receive the same terms that are received by those who’ve got impeccable credit. However, that doesn’t mean you can’t venture into the domain of real estate as an investor. You definitely can, provided you get the right lender.
How’re you going to look for mortgage lenders?
Don’t lose heart simply because you’ve got bad credit, for the 4 sources discussed below can provide you with scope to foray into the world of real estate. In other words you could put it as the various ways with the help of which you can search for mortgage lenders.
1. Federal Housing Administration: Ever since the subprime meltdown, this has perhaps been one of the most popular options. You can actually take advantage of the Federal Housing Administration or FHA loan as the requirements have been loosened up to a certain extent. This could truly provide necessary zeal to your investment. Moreover, if you feel that you aren’t interested in making a huge down payment, then an FHA would obviously be the right choice for you.
2. Hard money lenders: Those lenders who take on a borrower without really verifying the credit score are the hard money lenders. However, they require you to make a huge down payment and this acts as compensation for your poor credit score ultimately. Since you’re an investor looking out for investment properties, hence hard money lending could just prove to be the right option for you.
3. Adjustable rate mortgage: You can actually get hold of an adjustable rate mortgage and that too because of the present market scenario. Now seems to be the conducive time for an ARM (adjustable rate mortgage) or interest only mortgage. This obviously entails a higher rate of interest. If you say yes to it, then you’re definitely going to be able to get it.
- 4. A mortgage broker: There’s always the final option of getting in touch with a credit union or local bank. In spite of all this it’s advisable that in your credit situation you get in touch with a mortgage broker. This provides you with better chances of striking a worthwhile deal.
Should you go for a mortgage broker or a bank?
Now, in your confusion to get hold of the right kind of financing, there can always arise confusion between whether you should go for a bank or a mortgage lender. This is why it’s essential for you to understand who a mortgage lender is in the first place. Mortgage brokers happen to be sort of independent insurance agents. Having access to quite a few different mortgage lenders as well as different programs obviously makes mortgage brokers a more viable option. You see mortgage brokers are the ones who’re mostly responsible for originating the loan in the first place. They then process it and finally pass it along to the lender, who’d then sell it to you.
Now, if you’re to consider banks on the other hand, then you’ll see that they’ve got more of a corporate approach towards the whole process. Their fee structure is literally fixed and the mortgage bankers associated are also required to stay fixed with them. Now it depends whether or not you’re looking for more stability as an investor; for if you actually are, then this should prove a good option.
You must by now realize the fact that you’ve got a plethora of options to go for as an investor, so make use of these opportunities effectively.
