How to Procure Financing for Your Real Estate Investment

How to Procure Financing for Your Real Estate Investment

When it comes to building your nest egg through real estate investing, doing it with all cash isn’t always the best option. In fact, there are many benefits when choosing to finance your investment property.

“There’s great news for investors seeking loans right now: the current 30-year fixed mortgage rates are extremely favorable,” says Chris Diaz, vice president of HomeUnion® Lending. “While rates for investment homes tend to be slightly higher, now is an excellent time to finance your investment property.”

To best help you procure financing for your investments, Diaz has put together a list of important tips for investors seeking financing.

Investor signing loan documents

Insider Tips to Procuring an Investment Home Loan

When it comes to getting a loan, the more you know and do, the better your chances at getting financing. While there are many details worth considering, here are the ones you should complete:

Transparency is Your Ally

Transparency is key to the entire process. When attempting to procure an investment home loan, you should be as transparent as possible. As your chances of receiving financing depend largely on your own personal financial situation, you will want to make this clear from the very beginning. Leaving out important details can hurt your chances of receiving loan approval. “If any aspect of your job or credit is changing, it’s crucial to let your Loan Officer know beforehand,” Diaz notes.

Timing is Everything

Make sure all of your outstanding debts— everything from your monthly credit card minimum payment to personal loans— have been paid on time, especially those within the last 12 months.

Pay off Outstanding Debts

If possible, you should pay off all collections/judgments at the time of funding. And you shouldn’t make any major purchases like a new car or boat while you’re in escrow— as this can affect your ability to close. Keep your account activity during this timeframe to a minimum.

Obtain Proper Documentation

As soon as you know you’re going to need a loan, it’s important that you set aside documents regarding your income, asset(s), and any outstanding mortgages. Having this standard documentation ready will enable your Loan Officer to process your loan more efficiently.

income documentation_thumbnailHere’s a list of standard documentation to gather:

  • Last two years’ federal tax returns with W2s
  • Last two months’ paystubs with bank statements
  • Mortgage, property taxes, insurance, and HOA information for any other loans you may have

Consolidate Your Funds

It’s helpful to consolidate all your funds into one or two accounts about 75 days prior to purchasing. Once it’s there, let it sit! “Underwriters will ask for all account statements on any account where buyer funds come from and will want explanations for any large deposits or withdrawals,” Diaz adds. The less accounts, the more proficient the process will be.


HomeUnion® Lending – For All Your Financing Needs

HomeUnion® recently launched HomeUnion® Lending to expand financing choices for investors by giving them the option to obtain a loan for their investments.

By providing options such as GSE backed (i.e. Fannie Mae and Freddy Mac) loans when appropriate, while also giving investors the choice to use asset-based lending vehicles, HomeUnion® Lending provides investors with a viable alternative to the banks. “We help investors attain their goal of investing in single-family rentals by providing a seamless process when they need to procure financing,” Diaz says. “Our team has years of experience in the real estate industry, and takes pride in guiding our investors through the entire closing process.”

To hear more about how HomeUnion® Lending can help you, schedule a free,non-obligation consultation with a Solutions Manager by calling 888-276-0232 or scheduling a consultation now.

Schedule a Free Consultation


Ready to learn more? Schedule a call