Buy Fix and Profit http://www.buyfixandprofit.com Buying Fixing and Profiting from Real Estate Sat, 18 May 2013 18:13:40 +0000 en-US hourly 1 /?v=3.4.2 10 Factors Affecting Rates on Investment Property /10-factors-affecting-rates-on-investment-property/ /10-factors-affecting-rates-on-investment-property/#comments Sat, 02 Feb 2013 06:51:40 +0000 Buy Fix and Profit (Guest) /?p=5884 Predicting the rates on investment property is like gambling in the sense that there are a lot of factors that you would want to consider and yet, the results are still uncertain. Still, there are a lot of economic indicators that are affecting rates and investment property experts are using these barometers along with their [...]

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Dice 10 Factors Affecting Rates on Investment Property

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Predicting the rates on investment property is like gambling in the sense that there are a lot of factors that you would want to consider and yet, the results are still uncertain. Still, there are a lot of economic indicators that are affecting rates and investment property experts are using these barometers along with their experience and tested gut feeling to predict what will happen next. Here are ten factors affecting mortgage rates on investment property:

1. Bonds or mortgage-backed securities

The present rate of fixed rate mortgages are the most affected with the changes in the bond market rate, primarily treasury bonds. Individual mortgages are pooled together and sold as mortgage-backed securities and that is why any change in the interest rates on treasury bond affects mortgage rates.

2. Economic reports by major government agencies

Economic reports by major government agencies also affect mortgage rates and are used by savvy mortgage pros to predict mortgage rates.

3. Economic measures by the government

To keep rates down and to encourage home buying, the government has been very busy investing in major mortgage companies.

4. Unemployment rate

Since people buy less housing or even go down to foreclosure when unemployment rate is high, it is also a strong indicator of changes in mortgage rates.

5. Interest rates on Federal Reserves

When the interest rates on Federal reserve goes up, mortgage rates will also follow to compensate for borrowing from the government.

6. Economic condition

The economic condition is a major factor in the fluctuation of mortgage rates. When the economy is down, there is less house buying and mortgage rates will also go down. When the economy is booming, mortgage rates will also follow.

7. Inflation rate

Theoretically, rising inflation would drive demands for mortgage low for a period of time which will lead to decrease in interest rates overtime.

8. The mass media

The opinion of the mass media has great impact on consumer’s buying decision and this could lead to high or low interest rates.

9. Foreign exchange

Foreign exchange fluctuation can also lead to fluctuation in mortgage rates.

10. Unforeseen events

Natural calamities have great effects on mortgage rates when they do happen.

While there is no hard and fast rule to determine rates on investment property, these indicators can give you a lot of ideas regarding the way things are going. Just like in any form of investment, timing is essential and a lot of intelligent guesses.

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Mortgage Calculator for Rental Property—How to Calculate Positive Cash Flow /mortgage-calculator-for-rental-property-how-to-calculate-positive-cash-flow/ /mortgage-calculator-for-rental-property-how-to-calculate-positive-cash-flow/#comments Thu, 31 Jan 2013 06:37:44 +0000 Buy Fix and Profit (Guest) /?p=5877 The best time to calculate whether you will have a positive cash flow on a rental property is before you buy it. You need to use a mortgage calculator for rental property so that you will have a more or less objective calculation and more reliable results. If you already have the property, then the [...]

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Calculator Mortgage Calculator for Rental Property—How to Calculate Positive Cash Flow

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The best time to calculate whether you will have a positive cash flow on a rental property is before you buy it. You need to use a mortgage calculator for rental property so that you will have a more or less objective calculation and more reliable results. If you already have the property, then the best thing that you can do is to lower your expenses relative to your income so that you will still have a positive cash flow.

Online Mortgage Calculator for Rental Property

An online mortgage calculator for rental property will greatly help you determine whether you will have a positive cash flow or not. You have to remember though, these are estimates and do not necessarily reflect all that you need to know so take the results with a grain of salt.

1. Determine the principal

This is the figure that you will get minus whatever down payment you may have given. For example, if you purchased the property for $230,000, you put up a $30,000 down payment, your principal would be $200,000.

2. Select the length of amortization

In most cases, a mortgage for a house is amortized for 30 years. If you look hard enough, you can also find 40-year loans and there are those that are shorter than 30 years.

3. Enter your interest rates

You can find the interest rates from various mortgage company websites. Anyhow, you have to be careful. Due to the different of mortgage plans, not all interest rates may be posted in a website.

4. Determine the monthly rent

Determine the monthly rents that your property is likely to generate. Since this is an estimate, you have to consider the location of the property and determine the current going rate of the place. Try to determine also the rates of similar buildings of the area and what amenities they provide for the rates. This way, you will have a good estimate of how much you are likely to earn from the rents.

5. Calculate your annual operating expenses

Wear and tear is a very likely hole in your pocket so you should take this to consideration as well. On top of that, you also have to consider insurance and taxes as part of your annual operating expenses.

6. Calculate the net yield

After you have taken all the possible expenses, calculate it against your projected rental and what you get is your likely net yield. Since all these are rough estimates, don’t forget to be conservative in your figures.

You can use the online mortgage calculator rental property to determine the attractiveness of a given property. If the potential rental yield is high, then you can be sure to have a positive cash flow.

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Pros and Cons of 100 Investment Loans /pros-and-cons-of-100-investment-loans/ /pros-and-cons-of-100-investment-loans/#comments Tue, 29 Jan 2013 06:21:31 +0000 Buy Fix and Profit (Guest) /?p=5871 There are a lot of mortgage plans that allow you to make a loan even without down payment and even with investment property. Also known as 100 investment loans, they make the acquisition of investment property easier for those who cannot afford to put a large upfront investment. Although that is the case, this type [...]

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There are a lot of mortgage plans that allow you to make a loan even without down payment and even with investment property. Also known as 100 investment loans, they make the acquisition of investment property easier for those who cannot afford to put a large upfront investment. Although that is the case, this type of loan is a double-edged sword; it has a lot of advantages and disadvantages as well.

Important Things to Know About 100 Investment Loans

Before you decide to acquire 100 investment loans, you should know the risks involved. Not having to pay huge down payments might sound like a boon but its disadvantages can bite you if you’re not careful. In order to avoid regrets in the future, read on.

1. Accessibility

Since lenders are taking higher risks in zero down payment loans, this kind of loan may not be as accessible compared to regular loans. This is especially so if you’re a sub-prime borrower. So if you want to avail of zero down payment loans, you have to make sure that you have a good credit score.

2. Interest

Again this also has something to do with the risks the lender is taking. Since it is higher compared to regular mortgage, they tend to offset the risk by charging higher interest rates.

3. Equity

Since you finance 100% of the entire purchase price, you owe as much as the house is worth for a few years ahead. Since the value of the home and your outstanding balance remains almost equal, you will likely not have equity and owning the property will not increase your net worth.

4. Benefits

Because of the fact that you don’t need to shell out some money to own a property, zero down payment loans are making real estate easier to access. On top of that, you can also use the money intended for down payment for emergency fund or other investments.

5. Considerations

Aside from low equity and higher interest rates, zero down payment also means higher monthly payments because of higher principal balance. If you have higher monthly payments, you have to remember the fact that you have a higher risk of getting foreclosed.

100 investment loans are good if you know how to play your cards well. They are a good way to start an investment without having to produce hard cash as down payment. As long as you are careful, you can be sure to pull it through.

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How to Generate Quick Cash Flow from Investment Property /how-to-generate-quick-cash-flow-from-investment-property/ /how-to-generate-quick-cash-flow-from-investment-property/#comments Sun, 27 Jan 2013 04:26:46 +0000 Buy Fix and Profit (Guest) /?p=5862 Generating quick cash flow is becoming an issue among property investors due to the current economic condition. Although the need to grow your property investment is also important, quick cash flow is really important when you have needs to be addressed. Tips in Generating Quick Cash Flow Investors looking for quick cash flow can do [...]

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Cash How to Generate Quick Cash Flow from Investment Property

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Generating quick cash flow is becoming an issue among property investors due to the current economic condition. Although the need to grow your property investment is also important, quick cash flow is really important when you have needs to be addressed.

Tips in Generating Quick Cash Flow

Investors looking for quick cash flow can do a number of things to accomplish it. You need to be a little more proactive in order to achieve it. Here are a few tips:

1. Improve the appeal of your property

Renovation, landscaping and better security will really come a long way in increasing the appeal of your property. You can’t find high paying tenants when the property doesn’t seem to look habitable.

2. Furnish your property

Tenants who don’t need to furnish the property they are renting are more likely to pay higher rents. This is especially so when your target market is the corporate type who comes from overseas or those from the interstate.

3. Ask for higher rents

This might sound obvious but most property investors don’t want to ask for higher rents because they don’t want to make their life difficult. But the fact of the matter is, you won’t get what you want if you don’t ask. You should let your clients know that you have high expectations from them right from the start go so that they would adjust accordingly.

4. Consider renting out per room

Depending on your area, it might be a better business strategy to rent out per room. Although this will make collection a bit of a challenge, this will definitely increase your cash flow. You have to be careful though, your likely target market in this case are students who may not have stable sources of income and things can get messy in the long run.

5. Sacrifice equity in exchange for cash flow

A “wrap” or a lease/option can be legally entered into between you and your tenant agreeing to give away future capital gain for a higher rent at the moment. A lot of property investors are doing this; sacrificing equity for better cash flow.

Following these tips will definitely result in quick cash flow from your investment property. You have to remember also that there is also the need to grow your business and while it will temporarily slow down your cash flow, there is a need to balance between the two.

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Refinance Mortgage Rates for Rental Property /refinance-mortgage-rates-for-rental-property/ /refinance-mortgage-rates-for-rental-property/#comments Fri, 25 Jan 2013 04:15:52 +0000 Buy Fix and Profit (Guest) /?p=5855 Even if the property is occupied by tenants and you really never get to call it your primary residence, you can still refinance it. You have to bear in mind though, that new restrictions apply to this scenario and you might have a harder time finding a lender who will finance this kind of mortgage. [...]

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Even if the property is occupied by tenants and you really never get to call it your primary residence, you can still refinance it. You have to bear in mind though, that new restrictions apply to this scenario and you might have a harder time finding a lender who will finance this kind of mortgage. If you follow the tips given below, you can lower your refinance mortgage rates for rental property or you can even cash out some of the equity that your rental home may have.

Refinance Mortgage Rates Rental Property Considerations

If you are planning to refinance your rental property, there are certain things that you need to do in order to make the process a little smoother for you. Here are some tips:

1. Upgrade the property

Refinance rates are often based on the equity that your property may have. When you make some improvements like changing the fixtures, putting some new appliances and improving the exterior decorations, you raise your property’s appraised value. This will make you a less risky borrower and you can avoid paying high mortgage insurance.

2. Keep a record of all income and maintenance spending

It is very important for a small business to keep a track record of all income flow so that you will not have a hard time proving it to prospective lenders. Also maintaining a strong relationship with your tenants is a plus and other times you may find refinance deals more quickly approved.

3. Be ready to pay higher rates

In every deal with the bank don’t forget to haggle, because as per most experts’ advice, most of the banks nowadays charge you with a full point in addition to the interest in your loan. Absentee owners have lesser to lose when a foreclosure happens than primary homeowners even when there are tenants that are evicted in the process, so even if you can haggle with your lender, don’t expect to get the lowest rate you see advertised.

4. Shop around for better rates

We may be warning you to expect to pay higher rates but that does not mean you don’t llok for better rates. After all, you would want to refinance to find better rates. Use your connections and scour the Internet for the lowest mortgage rates. You may have a better chance with mortgage companies specializing in investment property than traditional lenders.

Following these tips will help you find better refinance mortgage rates for rental property. Although it can be difficult and finding the right lender might be equally tough, it’s not impossible. With a little persistence and together with these tips, you can definitely refinance.

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Paying Tax On Rental Income – Knowing The Rules To Cut It Down /paying-tax-on-rental-income-knowing-the-rules-to-cut-it-down/ /paying-tax-on-rental-income-knowing-the-rules-to-cut-it-down/#comments Tue, 22 Jan 2013 08:59:27 +0000 Buy Fix and Profit (Guest) /?p=5847 When you’re into rental business, paying your taxes is one of your responsibilities. However, you want to make sure you get all your legal taxable deductions possible from your rental income. Before putting property up for rent, you know all too well that you cannot get away from paying tax on rental income, hence, a [...]

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Tax 150x150 Paying Tax On Rental Income   Knowing The Rules To Cut It Down

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When you’re into rental business, paying your taxes is one of your responsibilities. However, you want to make sure you get all your legal taxable deductions possible from your rental income. Before putting property up for rent, you know all too well that you cannot get away from paying tax on rental income, hence, a significant rental property income may result in a huge tax bill. Knowing the tax rules can therefore help you cut down taxes on rental income

Keeping More Of Your Money Even While Paying Tax On Rental Income

It is important to be knowledgeable about the expenses that you can claim against your rental earnings. These include expenditures incurred off the rental property. Among them:

Repairs and Maintenance Costs

The amount of repairs can be taken off the rental income tax. Maintenance costs may include property improvement such as painting the walls, replacing and plastering the walls, fixing windows or holes in walls, adding furniture etc.

Depreciation Costs

By depreciating the property, you can cut off some amount in your tax every year. IRS allows up to 27.55% depreciation per year.

Travel Expenses

IRS allows tax deductions for rental property owners with travel expenses related to the rental property. For example, traveling to the rental property for maintenance purposes, or meeting with a new tenant, or even going to a hardware store to purchase items to be used for repairs of the rental property, etc. One can deduct the expenses either through real expenses or the mileage rate. The standard mileage rate for 2012 is 55.5 cents per mile for all business distances.

Contractor Service Fees

You can deduct the services/wages as a business expense for any task or service related to the rental property.

Professional Services

IRS allows rental property owners to deduct fees to pay for accountants, attorneys, real estate advisers, etc. You may also deduct this amount as an operational expense unless the fees are not paid for their work including their rental property activity.

Insurances and Mortgage

You can also deduct insurance premiums paid for rental property such as theft, fire flood insurances. If you pay the insurance premiums for 2 years in advance, you may cut off some part of the premium every year to be used in the same year but may not take the whole two-year premium in one year. If you took out a mortgage loan on the rental property, you can claim interest on loan from the income you receive from that rental property or claim the annual interest payments as tax allowance.

Understanding tax rules will enable you to keep more money from your rental income instead of paying them as taxes. When paying tax on rental income, remember to always use your gross total rental income then deduct the deductible tax expenses from that. What remains after that is your taxable income from property.

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How To Successfully Mortgage Refinance Investment Property /how-to-successfully-mortgage-refinance-investment-property/ /how-to-successfully-mortgage-refinance-investment-property/#comments Sun, 20 Jan 2013 08:43:31 +0000 Buy Fix and Profit (Guest) /?p=5838 If you’re looking for great opportunities to help boost your finances, you must look into investment properties. And not only that, if you’re looking to securing money fast for added investments, you can mortgage refinance investment property. The general purpose why people refinance investment property is to pay a smaller amount in overall interest, thus, [...]

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Figures 150x150 How To Successfully Mortgage Refinance Investment Property

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If you’re looking for great opportunities to help boost your finances, you must look into investment properties. And not only that, if you’re looking to securing money fast for added investments, you can mortgage refinance investment property. The general purpose why people refinance investment property is to pay a smaller amount in overall interest, thus, decreasing monthly installments. And, a cheaper interest rate translates to financial savings. However, to nail down a successful refinancing, you have to comply to a few rules prior to applying.

Understanding the entire process of refinancing can be challenging especially with a number of choices to choose from. For people thinking about refinancing, taking the time to understand the procedure will help you decide if refinancing is worth it.

Mortgage Refinance Investment Property – Factors To Consider Before Applying

Meeting prerequisites, equity, interest rates

It is possible to refinance an underwater mortgage, but it will not be easy. Hence, building equity is important. Since you are refinancing your investment properties, interest rates should also be considered. You must need to meet prerequisites such property title, details about your complete assets and debts, bank account numbers, etc.

Have a property revaluation handy

The best way to gain more in refinancing is to let the bank re-evaluate your property. To boost your chances and make refinancing more favorable to you, make sure that your property is in tiptop condition. This means the property, although it depreciates in value, still has structural integrity and is well-maintained. The best time to do the revaluation is before any tenants occupy the property.

Meet the credit score

A credit rating score of 700 and above will allow you a greater chance to refinance. Make sure to get a copy of your credit report, too.

Have sufficient income

Many investors are unable to refinance because of not enough income. Lenders want to make sure you have a monthly income to sustain your debts, mortgages and monthly bills and not depend on the investment property’s income to pay off debts. Have documents such as authentication of employment and income ready.

Determine that your LTV is lower than 85%

A loan-to-value ratio of more than 85% eliminates your chances of refinancing. To compute for your LTV, divide your existing mortgage value to your investment property’s value.

Anyone can mortgage refinance investment property, especially when a financial boost-up is wanted; knowing the factors that would give you greater chances to refinance, and even ensure success, is therefore important.

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Save Money While You Mortgage Investment Properties /save-money-while-you-mortgage-investment-properties/ /save-money-while-you-mortgage-investment-properties/#comments Fri, 18 Jan 2013 08:28:08 +0000 Buy Fix and Profit (Guest) /?p=5828 When talking about mortgages, what instantly comes to mind is money going out of your pocket. But did you know that you can actually still put money back into your pocket even when you are actually getting it out? There are several ways to help you cut mortgage costs and save money than you think [...]

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When talking about mortgages, what instantly comes to mind is money going out of your pocket. But did you know that you can actually still put money back into your pocket even when you are actually getting it out? There are several ways to help you cut mortgage costs and save money than you think possible. Below are a few tips on how to save money while you mortgage investment properties.

Look beyond the figures that you see

You have found the loan with the lowest interest rate, but have you checked the other fees associated with the loan? There are fees that you must pay when purchasing properties – from survey fees to inspection fees to mandated state, federal, or county fees and of course, closing costs, which are fees charged at the closing of the loan. Be aware of these fees as these costs may cancel out the benefits of your low interest rate loan.

Shop around for at least three mortgage quotes

Shop around and compare quotes from multiple mortgage brokers. Research conducted by Susan Woodward and Robert Hall revealed that based on a $100,000 principal, you can save up to $981 in origination fees if you shop for at least three mortgage quotes and $1,393 if you shop for four quotes.

Shop around and compare lenders on the same day

The finance industry is one of the fast-changing industries where rates change every day or even every hour. When shopping around for loans, make sure to move fast – shop for rates on the same day, or within a 24-hour period otherwise, you run the risk of inaccurate comparisons. Remember, poor deals arise from sloppy decisions.

Steer clear of lenders with application fees

Application fees cost anywhere from $75 to $300. These are fees that cover the costs of loan request processing and checking your credit report, however, if your loan request don’t get approved for whatever reason, you can say goodbye to your money because these fees are usually not refunded. Good news is these are costs that you can avoid and even better, there are plenty of reputable lenders that don’t charge application fees.

Taxes and insurance

Even when two homes have the same price, one may be cheaper. When comparing properties with the same price, check for hidden costs, such as taxes and insurances as these will affect your monthly payment. You will be surprised that when added up, can amount to thousands of dollars.

When you mortgage investment properties, you must remember that it is a major expense that must be maintained all throughout the loan term. Hence, looking beyond the price and interest rates can help you end up saving money in the long run.

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Choosing the Best Mortgage Rates On Investment Property /choosing-the-best-mortgage-rates-on-investment-property/ /choosing-the-best-mortgage-rates-on-investment-property/#comments Tue, 15 Jan 2013 02:06:07 +0000 Buy Fix and Profit (Guest) /?p=5819 A lot of people are now using their second home as investment property. Aside from the obvious reason of additional cash flow, investment properties are stable investments because they are not as volatile compared to other forms. If you want to follow this business path, you need to be familiar with mortgage rates on investment [...]

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A lot of people are now using their second home as investment property. Aside from the obvious reason of additional cash flow, investment properties are stable investments because they are not as volatile compared to other forms. If you want to follow this business path, you need to be familiar with mortgage rates on investment property because you will need a mortgage to get started.

Choices for Mortgage Rates On Investment Property

There are a lot of things to consider when choosing the best mortgage. When you know your way around this, your way around your entire investment will be smooth. So what exactly are these things? Below are some of the aspects that you need to look into.

 

1. High down payment

Under normal circumstances, high down payments are required by banks to secure their investments. This is to deter you from walking away from your debt and in cases that you really do, their losses are not that huge. On the upside, you can also enjoy lower mortgage rates if you put up a huge down payment and this is advantageous in the long haul. There are investors that would offer zero down payment mortgages but they are generally considered risky for both parties. The lender would be forced to charge you higher mortgage rates to cover up for his risks and you in turn will have a hard time coping with high monthly payments.

 

2. Fixed term rate

If you have a good idea of your cash flow, fix term rate is the best option that you should get. The advantage of a fix rate is that you can avoid a lot of surprises down the road.

 

3. Rentals add back

Rentals add back are used as backup plan in your property investment and can range between 50% to 100% on regular mortgage. You can use this to qualify you for the mortgage or use this as payment method.

 

How to Find the Best Mortgage Rates On Investment Property

There is no hard and fast rule to finding the best mortgage rates on investment property. Factors like the location of your property and daily base rates play a role in determining the rate that the lender will give you. The first thing that you should do is determine how much money you’re willing to spend on your investment. The lower you are planning to spend the lower would be the rate.

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International Mortgage for Investment Property—A Life Saver for Real Estate Investors /international-mortgage-for-investment-property-a-life-saver-for-real-estate-investors/ /international-mortgage-for-investment-property-a-life-saver-for-real-estate-investors/#comments Sun, 13 Jan 2013 10:10:20 +0000 Buy Fix and Profit (Guest) /?p=5766 With international mortgage for investment property, US real estate investors can now make a loan to finance their real estate investment through international banks. You can choose the kind of currency that your loan will be denominated in and you can save a lot of money because in most cases, these countries have lower interest [...]

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With international mortgage for investment property, US real estate investors can now make a loan to finance their real estate investment through international banks. You can choose the kind of currency that your loan will be denominated in and you can save a lot of money because in most cases, these countries have lower interest rates compared to the US. At the moment, there are six currencies that have lower interest rates than the US dollar with the Japanese Yen – currently at 2.29% – being the lowest. Suppose you have a $1.5 million loan at 30-year mortgage, you would pay approximately $11,294/month. If you have the same loan in Yen, you would pay approximately $5,764/month and get a savings of $5,529/month. Isn’t that sweet?

How International Mortgage for Investment Property Works

At the moment, the loan only works for investment property and you can use it to purchase or refinance. International banks will not allow you to make a loan for your primary home. Although the loan rates fluctuate, you can also switch currencies. For example, if the Yen interest rates begin to rise, you can then switch to Swiss Francs. The loan is paid in US dollar and converted into the currency of your choice at the current exchange rate. It is therefore important that you understand that if there is a huge decline in the dollar in relation to the currency that you have chosen, all your interest savings will be wiped out.

1. Loan features

Loan features include 30-year loan term or until you reach the age of 70, a minimum mortgage of $75,000, and up to 100% financing in some cases. It also has no prepayment penalties and you can choose between a fully amortized or an interest only payment option.

2. Costs

Generally, international mortgage for investment property charges a 1% arrangement fee and a 0.3% commitment fee. You will also need to pay for a 0.25% charge if you are a corporation or a trust.

3. Risk

You have to be aware that currency fluctuation can work for or against you. Not only will you need to be mindful of interest rates, you also have to be mindful of currency fluctuation. But you also have to remember that you have the option to switch currencies.

4. Other considerations

At the moment, not all states are eligible for international mortgage. Only Hawaii, Nevada, California, Colorado, Florida, New Jersey, Connecticut, New York, and Washington State can be financed for now. The property cannot be owner-occupied, neither can it be for vacation use. But it you decide to buy a property overseas, it can be owner-occupied or used for vacation.

The difference in interest rates that international mortgage for investment property has to offer is the lifesaver that real estate investors are looking for. It’s not without risks, but what isn’t in this business? If you are careful in playing your cards, this can literally save you thousands of dollars.

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