When it comes to property investment, is not for those who have been successful like CEO’s of big companies, business moguls or any other rich and successful. Whether you have enough available cash or you don’t, there is always a way out to financing investment properties, let’s face it, why would anyone want to invest on such areas? Most of us and big percentage of people who are investing on properties are doing so to finance their retirement, others want to get more wealth and earn enough to finance other properties.
As Currency Liquidator suggests investment properties can be said to be properties whereby the owner don’t occupy them, they are either used to generate extra income through capital gains. Of course they do come with risks and proper knowledge or rather research is necessary. When approaching lenders to finance your investment property you will experience hurdles as they don’t automatically approve right away thus you may require a good credit background, a sound investment plan and some lender may require you to have collateral. Financing your own home and property tend to be very different and you may be surprised that financing an investment property might require a huge amount of down payment and you will find out that most of the lenders have many restrictions and regulations because they well know how risky it is to finance such projects.
Secured loans
These are probably most available loans available loans available, these loans require the buyer to surrender things like land title deeds, cars, house and many others as collateral. It is said to be an attractive loan since it has lower interest rates reason being that, the lender lowers his risk because collateral maybe used in case the buyer fails/ defaults payments. If you have ever been denied unsecured loan, this is a good way to go but you should always be careful on the collateral that you chose to secure your investment property loan.
Unsecured loans
You won’t need any collateral for the unsecured loan but be very careful because the interest rates are normally high and you should always check with the bank as they get wary when it comes to property investment, there are many restrictions here like the lender might require 51% occupancy to the property and the reason why the lenders consider it to be risky is because they don’t have anything or ability to seize any asset in case of default and the only way is through suing the buyer which might be an expensive thing to do, absence of security makes it impossible for the creditor thus creating risk making high interest on such loans especially when it comes to investment property.
While you are still on your investment plan, you will experience more and more regulations from the lenders, keep in mind that lenders are very keen on funding such projects you will need to shop more because not all lenders have same regulation s and restrictions, some lenders might require you to have approval from housing associations.