|Posted by yogi2011 on September 19, 2011 at 6:30 AM|
Banks offer a variety of mortage loans and products. Getting a loan through a bank is the most common method of financing properties but not all investors qualify. If you have steady income that you can prove (W-2 forms from your employer), have a good credit score (680 or higher), and have a down payment (20% or more), you have the greatest chances of being approved for a loan through a conventional bank when you are investing in real estate.
Fixed: Both the interest rate and the monthly payment are fixed.
Flexible rate: Both the interest rate and payment are flexible and change according to market prices and situation.
Interest only: Borrower pays only the interest on the loan for a number of years and during that time none of the principal is paid off.
Balloon mortgage: Both the interest rate and the monthly payment are fixed for a certain length of time, but at the end of the short-term loan, a much larger "balloon" payment is due for the balance.
Assumable mortgage: Both fixed and flexible rate mortgages can be assumable. A borrower simply takes over someone's else's payments and becomes the new owner. The original owner gives up their ownership of a property without the new borrower taking out their own new loan.