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Private Financing vs. Traditional Financing 3 comments
One, of many, popular real estate concerns I encounter often revolves questions surrounding financing. Whether you're a retail buyer looking for your first home or a savvy investor seeking funds to leverage your next deal, financing plays a role in all non-cash closings.
Knowing how and where to look for financing, then, becomes as integral a part of your home search as the home itself. Knowing the pro's and con's of each financing platform can help you make the best financial decision.
I have aligned myself with multiple institutions and individuals that offer BOTH types of financing, so finding the option that best fits your needs has now become a passion of mine.
Traditional Financing (Mortgage)
Traditional financing is the most common form of financing, with regards to the purchase of real estate. This platform will, typically, provide you with a 30 year fixed rate mortgage somewhere in the range of 4-7%. This is a safe financing strategy and will require a credit score of 620 or higher; often 660 in some cases.
Example: 5% down, 6% interest rate, 30 year term, close in 30-45 days, credit requirement.
Private Financing (Equity Lending/Hard Money)
Private, or alternative, financing is another means of financing your first, or next, property. Although the terms tend to be a bit more dramatic to the first time buyer, they are quickly witnessed as supplemental to the investor seeking a fast approval and quick closing. Private financing will tend to be based more on the property and less on the buyer; whereas, with traditional financing, the buyer is much more integral to the loan's approval.
Example: 20% down, 14% interest rate, 4 year term, close in 7 days, no credit requirement.
For more information, visit WCEquity.com or Google Search "Kurt Westfield Real Estate" today.
Disclosure: no positions
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This post has 3 comments:
This blog info was very helpful to me because I started out with one of those Guru's real estate investment no money down course's and the only thing I have is the course full of instructions. You have given me more on this blog than that course did regarding gettin finance.
thank you.
TAB
Very good comparison concerning the type of financing available/ unique differences. I am sure you could write for every outlining the financing in and outs (how to develop a strategy for each deal vs. the persons needs).
Thanks for the tip on financing.
Russ
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