Loans for Real Estate: Quick Reference Guide

There are more ways to finance real estate investments via loans for real estate today than ever before. You have a few different financing options depending on the type of property, amount you need to borrow, and the condition of your investment. 

Loans for real estate fall into several buckets. They vary from a range of types of investment property mortgages to hard-money lending and portfolio loans. You could even turn to peer-to-peer lending platforms for crowdfunding to get the money you need. 

The best loans for real estate options depend on the project. It pays to know the possibilities. Below is a simple quick reference guide to help you on your journey through loans for real estate.

Investment Property Mortgages

A traditional mortgage tailored to investment properties may be the best coption for new real estate investors looking for loans for real estate. Investment property mortgages operate the same way as a first mortgage on your home. Lending requirements may be more stringent and interest rates can be higher, though. You can use conventional mortgages to borrow money for up to four investment properties at any given time. If you want to mortgage a fifth property, you’ll need to consider a portfolio loan or commercial residential real estate loan.

Government-Backed Loans for Investors

Homeowners often turn to government-backed FHA or VA loans to buy their first home or subsequent owner-occupied properties. These loans are enticing, with low interest rates and down payments as low as 3.5%. An FHA or VA loan may not be the ideal way to launch your career as a real estate mogul, but it can give you a jumpstart if you’re short on funds for a down payment or your credit score is less than stellar.

Home Equity Loan Or Home Equity Line Of Credit (Heloc)

What if you don’t have six months’ worth of cash or liquid assets to back an investment property mortgage? You might consider borrowing against the equity in your primary residence. You can use a home equity loan or HELOC to finance your investment properties. If you don’t have enough home equity to finance an investment property in full, consider using a home equity loan or tapping into a home equity line of credit to borrow 20% of the investment property purchase price. Then use that money as a down payment to secure an investment property loan.

Portfolio Loans

Like hard money loans for single properties, portfolio loans are for seasoned investors looking to invest in multiple properties at the same time. Consider a portfolio loan if you’re looking to invest in a new community of single-family rentals or a block of homes. Just like you can save money when you buy in bulk at a warehouse club, mid-term lenders offer savings if you mortgage more than one property at the same time. You’ll also reduce paperwork and save time since you’re only going through one loan application and one closing to borrow money for multiple properties.

In conclusion, whatever type of financing you choose, make sure you’re comparing apples to apples when it comes to terms, fees, and interest rates. Give us a call or text at 1-855-913-8637 or visit our website at and let us help you with your search for loans for real estate today!

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