Just a basic question really. Looking for responses from people who have gone through similar situations. I am 27 and looking to purchase my first real estate property in a few months or maybe spring of 2016. Im currectly rebuilding my credit which was pretty bad but iam slowly catching everything up but still at rounghly a 570 credit score. Im thinking FHA is propbably going to be my best bet for a loan. I would like to purchase a multi unit property and be able to live in one unit and rent out the rest for positive cash flow. I havent yet made it to any banks becuase im nervous I will be denied fairly quickly at this point. Any tips or advice for getting financing? I am looking in the state college PA area if anyone is local and would like to chat and help me analyze a couple deals.
@Justin Ashton I would continue to work on building your credit up so that you are able to obtain the best financing available for you when you go to purchase. You can purchase a 1-4 unit property using an FHA loan for 3.5% down, as long as you plan on living in it.
@Justin Ashton I agree with @Josh Mitchell that it would be best to build your credit score to get the best rate possible before applying. The first house I bought was a 3 family which I lived in one of the units and rented out the others. I used the FHA loan, which was a big help since I only had to put 3.5% down. Just a note, you only need to live there for a year and then you can legally rent all units.
My personal concern with the FHA loan in the PMI which the only way you can get ride of it now is to refinance or sell. If you plan to live there for a longer period and believe that rates might go up, it might be worth looking at conventional loans. When I bought my second place I used an 80/10/10 loan, which just means I got an 80% mortgage, 10% equity line, and put 10% down. Doing this you will avoid paying PMI. Some people dont like this option as equity lines are interest only(I just pay extra).
I am not local but if you want to contact me via email I can take a look at the deals and give my personal opinion on them. I hope all this helps.
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