Monthly Archives: February 2017

Miami Real Estate: Investment Loans

A loan on secured by Miami real estate collateral is typically known as a mortgage. This is the most popular form of real estate investment loan used by investors. Miami real estate investments provide an opportunity to generate cash flow. Apart from commercial banks, savings banks, savings and loan associations, credit unions, real estate investment loans can also be obtained from insurance companies, mortgage bankers, mortgage trusts, investment trusts, pension funds and finance lenders. Private individuals sometimes offer real estate investment loans as well.

There are two types of Miami real estate investment loans, namely, residential loans and commercial loans. Property that is solely used for business purposes like malls or industrial parks would be termed as commercial real estate. Commercial loans include buildings, warehouses, and stores. These properties are generally five or more units. Property that is solely used for single unit housing purposes is termed as residential real estate. Residential loans include those properties that are bought for rental income and future appreciation. The borrower initially receives a lump sum from the lender, which has to be paid back in installments. Purchasing a Miami real estate residential property involves having significant funds. Before qualifying for an investment loan, three main factors are considered: investor’s income, credit scores and reserves. In order to qualify for a loan, there are five basic essentials: interest rate, terms, payment, final value and principal. Loans can carry a fixed interest rate or rates that vary with market conditions. Some loans have negative amortization periods; investors should be cautious of such loans.

Miami real estate investment loans comprise of interim loans, short-term loans and long-term loans. Apart from commercial and residential loans, the other types of loans that are offered are construction debt, permanent debt, equity financing, structured financing, interim financing, mezzanine financing, foreclosure investor money, hard money loans and residential repair funding.

Investors may not need perfect credit scores to qualify for real estate investment loans. Bad credit real estate loans are designed for those individuals who have a less than perfect credit report. It is a type of sub prime mortgage and is a higher risk to the mortgage lender because of the past credit history of the borrower. Bad credit loans allow individuals to obtain a mortgage for buying real estate when other more conventional mortgage lenders or banks may have turned them down.

The longer the tenure of a loan, the higher the interest rate will be. A 30-year fixed loan will have a higher interest rate than a 2-year fixed loan. But people generally opt for a loan with a shorter-term fixed option, as the rate of interest is lower and hence the monthly payment is lower. To get a loan there are no pre-determined limits set for the real estate investor.

Some Miami real estate investors tend to prefer in marketable real estate assets. Buying shares in a real investment trust or REIT is one way to do this. Investment loans can be used to partially fund such investments and the REIT shares are used as collateral to secure such loans.

Present-Day Investment for Future Security

If you are looking to invest for the future, invest in a house. With real estate prices not looking like they will fall in the near future, it is a good idea to put your savings into buying a house. You never know what tomorrow might bring, and if nothing else, a house provides a feeling of safety during the tough times. Moreover, it is a good feeling to have a place to which you really belong. No matter how much at ease you feel in that rented apartment of yours, you will have the subconscious feeling that you will have to leave the place someday. The owner, after all, is not you but someone else.

You will always find me advocating the benefits of real estate investments. We all spend so much money on rent every month anyway. So why not summon up a little more and invest that in some lucrative property? Not being able to afford a house cannot be an excuse anymore. This world that we inhabit is brimming over with loans, mortgages and more loans and mortgages. No matter how limited your budget, there is definitely a loan or a mortgage that will suit you best. All you have to do is make up your mind what kind of a mortgage loan you are hoping to find.

Does the idea of a fixed rate mortgage appeal to you? Or would you prefer a mortgage with an adjustable rate? Are you intending to repay the loan over a long period of time? Or are you hoping to get a loan that permits you to do prepayment?

Once you have decided on the mortgage loan that you like best, all that remains is to go and unearth the house that you would like to invest in. Having bought the house, you will probably be feeling overawed by a sense of achievement. But now, you are probably a little broke and it may be time to mull over how this house can be made to work for you.

One great thing about owning a house is that you can go in for secured loans keeping your house as collateral. Such loans are less difficult to get, and they require you to pay much lower interest rates than unsecured loans of the same amount. Then again, if you are still in the process of repaying mortgage, you might consider releasing the equity on your home to avail of loans to fund other expenditure. If you already have another house, you could rent out the new place. If you are intending to sell the place after a given period of time, doing a bunch of home improvements will definitely raise the worth of your house. Whether you own a home or not, there is no doubt that real estate is a great place to invest.