Creative real estate mortgage loans sold to Fannie Mae or Freddie Mac require a down payment ranging from 10% to 25% with a financing fee ranging from 1.5 to 3 points. Please understand that these financing fees are imposed by Fannie and Freddie and are not charges from either your lender or your broker. However, the financing fee allows using conventional rates and loan limits. These conforming real estate mortgage loans are available as either fixed rate or an ARM. Even with the financing fees, these loans can be a good choice if your goals are to maximize cash flow and you plan to hold the property for a 3 to 5 year period. Ratios are normally 28/36, but with automated underwriting, excellent credit and some liquid reserves, it is common to see back ratios in the middle 40s. Rental income is decreased by a 25% vacancy factor but there are underwriting methods which eliminates this issue for experienced real estate investors.
The Creative Real Estate Investor Mortgage Specialty program (actually a growing group of creative real estate mortgage programs) allows purchase or refinances with only 5% equity. The creative real estate mortgage program allows up to 20 properties plus your home. Available up to $1,000,000 and 2-4 unit properties are acceptable. Ratios are generally 34/40 and a No Documentation creative real estate Mortgage program is available. Available as a fixed or adjustable rate in many reduced down payment scenarios..
I have an investor loan based on the LIBOR Index. The LIBOR (London Interbank Offered Rate) Index is more stable than the COFI index (Cost of Funds Index). Comparison charts between the COFI, LIBOR and MTA indexes are available. One feature of the program is four repayment options. You can decide to amortize the loan for 30 or 15 years, a minimum amount, or interest only. You can choose every month and have the flexibility to manage cash flow as never before!
Read more about Creative Real Estate Mortgage Costs
I have a page on how to calculate your creative real estate mortgage qualification ratios.
I have a page on documentation requirements.
If the building you are looking at contains 5 or more units, you will need commercial loans.
If your interest is in foreclosure property as an investment, visit my foreclosure page
Here are my thoughts on the difficulty of "flipping" investor properties.
For the the greatest flexibility and maximum loan qualifying ratios, you may be interested in the Cash Flow ARM.
New! I have added a page on how to properly compare different investment property that may be helpful to you
Learn about closing in an LLC
Learn more about Loan Modification. If you can not refinance, it may be the best way to save your home today.
As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your consumer debt is structured today can have a life changing effect in the years to come. Read more about this free, no obligation service.
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