What Type of Home Loan Will Your Next One Be or Are You an Investor?

It seems like your quest for a home or real estate loan depends on what you are trying to accomplish. Everyone is different in what they are looking for. Sometimes, the extra look may open up some of your loan options.

If you are selling your home, most people are expecting the buyer to have some type of traditional loan. Typically, these loans require a certain amount of money for a down payment and the rest is financed by a bank. The terms are normally 15 years, 30 years or 40 years depending on loans available for a certain bank. There are also no money down VA loans for veterans of the armed forces.

In standard home buying or selling, there are also the cash for homes investors. For the seller, this would add another option to choose from. Most of the cash for home investor offers will be less than the traditional retail value of the home. The investor, depending on purpose of investment, is trying to earn additional income from the home. It could be repair and resale income or even just steady rental income.

For the seller, it makes sense to get information on both types of loans. Most of us are familiar with the traditional loans. We are not full of knowledge on the investor offer. Normally, on a cash for home offer, you receive the offer within 72 hours of the request and close within 30 days. The offer is less than retail value and will be impacted by the amount of repairs that need to be done. However, for the seller, there are no closing costs, no real estate agent fees, and no additional costs for any repairs that would need to be done for traditional loan. The time frame is also a lot shorter for the close on a cash for home offer. You just have to take the time and look at advantages and disadvantages of your options.

For real estate investors, there are different loans available too. It does not mean that they cannot use a traditional home loan. It depends on their situation and what the investor would like to do. Some investors try to get more flexible loans based on resale value of investment home. Some use a “hard money” loan that normally come from an investor as opposed to a bank. These loans can be easier to obtain. Normally, the loan will be up to a certain amount based on the value of the home. Similar to cash for home loans, it is less than retail value.

For the person needing the loan to fix up a home and resale or rent, the amount will be less than retail. It is up to the person to do their own math to see if the resale or long term rental value will show some profit down the way. It is a little different for investors and those seeking a home to live in. Investors are seeking short term or long term profit from the purchase of a home. Each investment home can be different. There will be some that make money right away. Others that may show long term rental gains. There are some that will lose money.

This is just the tip of the iceberg on types of loans. It is a note as a reminder to know what loans are available to you before start your project or even your new home search.