Financing a new home purchase is a common subject among potential homebuyers and lenders. However, if you want to flip a home by enhancing an existing property and selling it for a profit, you may also require funding. Luckily, there are financing options for flipping homes if you know where to look. Here are some basic tips for funding a flip:
Hard Money Loans
A hard money loan is a common financing option for house flippers. These loans involve less underwriting and easier qualifications. Hard money loans can have much higher interest rates and startup fees than traditional mortgages.
Private Loans
Private loans are a good option for house flipping. However, they usually require you to have a preexisting business relationship with a bank to get one. If you’ve been with the same bank your whole life, they might be a good place to start since they’ll consider you a lower risk.
Personal Loans
Personal loans can be quick and painless, with no collateral involved. It’s easy to qualify for this type of loan and you can get your money faster than other loan options. However, these tend to have incredibly high interest rates compared to mortgages.
Home Equity Loan
A home equity loan is basically another mortgage with a separate monthly payment. This allows you to augment your current borrowing without changing the terms of your existing mortgage. A home equity loan uses the equity you’ve built in the home to invest in the flipping process.
Home Equity Line of Credit
A home equity line of credit works similarly to a credit card. This type of funding uses your house as collateral and gives you a credit line. These come with their own terms and special conditions but can be an excellent source of funding for flips that you expect to take many years at a time, as you’re often able to defer payments for an introductory period.
These are just some of the most common types of loans used to fund a flip. If you’re considering flipping a property, these financing options are a good place to begin.
About the Author
Daniel Martin
Membership:
National Association of REALTORS (NAR)
Connecticut Association of REALTORS (CAR)
Bridgeport Board of Realtors
Valley Board of Realtors
Greater Fairfield County CMLS
Connecticut CTMLS
Education:
Principals and Procedures of Real Estate
Naugatuck Valley Community College
Connecticut School of Electronics
Housatonic Community College
Achievements:
Connecticut Magazine 5 Star Realtor 2014-2023
Top Producer
Top Listing Agent
Top Selling Agent
Professional Specialty:
My experience and expertise in the home selling and buying process gives my clients an advantage in any real estate market.
*First Time Home Buyers
*Single Family Homes
*Multi-Family Homes
*Land
*New Construction
*New Residential Developments
*Condominiums
*Downsizing
*Rentals
Personal:
Lifelong Connecticut Resident
Married with 2 Children, 3 Grandchildren
Musician
Golf Enthusiast
Areas Covered:
I specialize in Fairfield and New Haven Counties. *Shelton *Trumbull *Stratford *Bridgeport *Fairfield *Milford *Danbury Beacon Falls *Brookfield *Naugatuck Valley It doesn't stop there - I can also refer to anywhere in the world! Niche Marketing My background in customer service and technology gives me a step ahead of the competition. I use every available Marketing Resource to make your home stand out.
