How to go about loans when first purchasing?

Question

I've been researching and researching before actually purchasing my first property, I know little about financing but ultimately looking for advice on what loans to look for and a financial smart way to go about it?

Nadeem Alamgir · Answer

If you’re planning to live in the property, FHA 3.5% down let you get in with less money down and you can still house hack if it’s a duplex, triplex, or quad.If you’re buying as an investment (not living there), most lenders will want 20–25% down on a conventional or DSCR investment loan. That’s why a lot of newer investors start with a house hack to lower your living expenses, build equity, and can transition it into a rental later.

Nikelyia Waters · Answer

@Nick Belsky Hey Nick, Still up for that call?

Nick Belsky · Answer

@Nikelyia Watersa

Happy to hop on a call to chat about all the various loan option out there.  There many types for sure...

Cheers!

Frankie Vozzi · Answer

Great question, Nikelyia financing is often the trickiest part of getting started. There are a few routes first-time investors usually explore, like DSCR loans (based on rental income rather than personal income), fix & flip funding if you’re renovating, or even bridge loans if you need short-term flexibility.

I just sent you a DM with a quick breakdown and some options to help you understand what might fit best for your first purchase. Excited to share some guidance!

Mike Paolucci · Answer

I'd recommend getting in touch with a couple of lenders and discussing options with them.

It all depends on your goals. House hacking investment vs buying just as an investment property.

If you're going to house hack, then the FHA (3.5% downpayment) is a GREAT option, however it will come with some stricter guidelines and inspections. You can always go conventional with as little as 5% or 10% down depending on your lender. Either way, you'll be paying for PMI.

If you're buying as a pure investment property, you'll be paying 20% for a single family and 25% for a multi-family. You can look in to DSCR options with as little as 15% down (depending on the lender) but you'll be paying higher on the interest rates with a DSCR loan. Best to make sure you run your numbers well and think about those kinds of factors.

Aaron Zimmerman · Answer

I'd speak with a great lender in your local market that can educate you. They will know various loan programs.

The two main ones you hear about are 3.5% down FHA and 5% conventional. Both have private mortgage insurance (PMI) but generally the 5% down is preferred as the PMI is usually less and you don't have to contend with self sufficiency fha tests on 3-4 unit buildings.

Zachary Clevenger · Answer

First time home buyer for sure. You can go the FHA loan if you desire, has a lower down payment threshold at 3.5%. BUT.... that puts you PMI. So you'd be paying a small amount per month until you meet 20% in equity of the property.

There are other programs as well, but that is generally the best path forward.

Do you have enough saved to put 20% down? Are you pre-qualified for a loan? Yes -for how much? No -I'd do this ASAP.

How to go about loans when first purchasing?

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