How can I get financing?

Question

I'm looking for financing for my first investment property. However, I don't own a home. Banks and mortgage brokers have told me that I won't qualify for a rental mortgage/investment mortgage if I don't own a home.

Is there anything I can do?

Jeff S. · Answer

You could buy a home (cheap) and move in for a year, fix it up and then rent it out. Keep repeating.

Tom S. · Answer

I would keep shopping for other mortgage brokers or work with smaller local banks. If you have a good job, good credit, and a downpayment I don't see why not currently owning your own home makes any difference in qualifying to buy an investment property.

- Tom

John Stevenson · Answer

If conventional financing does not work out, here are a couple of other options:

Find a property to rent-to-own or lease with an option to buy. If you have a lease-option for 5 years, at the end of that time, you will need to purchase the house and can get a bank loan then. Meanwhile, you can use the time to fix your credit and/or save for a down payment. Some contracts may put some or all of the rental amount towards the down payment.

Get owner financing or a land contract. Another option is to have the seller act as the bank. You make your payments, including interest, directly to the seller. Then after usually 3 to 5 years you make a lump sum payment to the seller. During this time, you should have enough equity to qualify for a standard bank loan.

Corey Scott · Answer

You need to find small local banks that dont sell off their loans to fannie and freddie.  If hey hold their own loan they can make their own decisions.

M Ness · Answer

Thank you for the replies, everyone. I spoke to a few more brokers who were a little more optimistic. I'm going to try to get prequalified with a few of them and see how it pans out. I'm also going to keep my eye out for owner-financing deals; seems like that would be perfect if I could find it.

Karen Margrave · Answer

It depends on your financial situation. How much do you have to put down, credit score, job, etc.

There are loans out there for first time buyers, down payment assistance programs, etc. Also, look on homepath.com and see if there are properties in your area.

Look on Craigslist and other sites for properties, and watch for owner financed properties, lease w/option, etc.

One thing I've learned over the years NEVER give up, or let someone else tell you that you can't do something!

Dale Osborn · Answer

Sounds like you are dealing with a greedy banker that would provide a loan for an investment property and also want to have it secured with your residence. Perhaps you should check around to see if they are all that greedy!

Mary Cronin · Answer

Sure. Look for owner finance, lease option or other creative financing method.

Maybe you need to research creative financing.

How can I get financing?

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