Once you have found an investment property that you would like to purchase, your next move is to start thinking of ways to finance it. If you are interested in single-family housing or investment properties that have only four units or less, your best choice may be a good lender.
Banks are also typically good; however, they usually offer loans with shorter terms and higher interest, especially for investment properties. It is best to give your local banks a call to see what they are offering on typical properties in the area.
The Best Deal…For Whom?
Mortgage brokers typically charge about one percent of the amount of the loan to find you a quality source for funding. The majority of mortgage brokers are on your side; however, not all mortgage brokers as exactly honest, upstanding citizens.
Typically, a mortgage broker is a salesperson with particular enticements that will earn you more money. Some mortgage brokers as for a small upfront fee, however, may not find the ideal loan program that best suits your needs.
For instance, your mortgage broken may be faced with the responsibility of choosing between two different loan programs. One bank offers a 7% 30-year fixed loan with a $2,000 bonus for the mortgage broker. The other choice is a bank offering 6.5% on a 30-year loan, but with no broker bonus. In many cases, the broker will take the deal that is best for him or her, which may not necessarily be the best deal for you.
Find Someone You Can Trust
The best idea when looking for a mortgage broker is to ask around. Find out whom your family and friends recommend. Look for someone you can trust who does not deal with questionable loan programs. Always as to see the specific details on all loan programs that are available to you. Mortgage brokers are required by law to show you any monies or commissions coming in or going out on a deal.
Property Options Australia
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Hi Sean,
I think mortgage brokers are a great idea and you’d have to find one to add to your real estate investment team. If you’re going to be buying investment property after investment property; you really need to find someone you can trust.
I have used a mortage broker on the past and have no problems, though nowdays I tend to like to go to the banks myself. It is quite easy to do loan research online now through sites like canstar.
Just so you know there is a small typo in the fourth paragraph.Thank you for the article.