Are your worried about rising interest rates? Read this!
Click Here for the audio only version on the Lady Landlords Podcast
One of the keys to success in Real Estate Investing is having a clear plan for financing your properties. Unless you are paying in cash, a lender of some sort will need to be involved in the transaction.
There are many kinds of lenders, so be sure to find the right one for your needs.
When it really comes down to it though, they are all looking for similar things. First, they want to see that you have some skin in the game. It is important to show that you too feel this deal is worth it so much that you are willing to put some of your own money where your mouth is. Next, they want to protect themselves by making smart investments just as much as we do!
Regardless of the lender, there are things we can do to help the process along!
Here are 3 tips for this week's guest, my Mortgage Lender, Brad Dixon, on the Lady Landlords Podcast:
The right time to speak to a lender is now. Even if you are still just thinking about how to purchase a property, start talking to lenders. This will give you the information you need to be prepared. Often, lenders can evaluate where you are now and help guide you on what you need to do over the coming weeks/months to make you a prime candidate for the best mortgage for you. Always better to know that information sooner than later. They will also let you know what documents you will need to have in order to ensure a smooth process when the time comes. If buying in NY, CT or Florida, reach out to my lender here for help.
I think we can all agree that some things have changed since 2020. Mortgage requirements did not escape unscathed either. The Feds changed up the rules for what is needed for a down payment on investment properties and this greatly impacts us as investors. The days of 10-15% down have gone and we are now looking at 25% on investment properties with very few exceptions. Even the down payments needed on owner occupied properties have changed! Listen to this week's episode of the Lady Landlords Podcast to learn more about what you need to have ready to avoid sticker shock down the line.
It's already happened this year and is expected to happen again soon. For the past few years, we have seen historically low interest rates and if you have been lucky enough to take advantage of them, good for you! Because we will probably never see those numbers again in our lifetime. Rates currently aren't too steep but who knows just how high they will go in the next 6 months or even the next year. This situation is a great reminder of two things: 1.) It's time to get buying and 2.) If the numbers make sense, a higher interest rate really doesn't matter after all. What I mean by this is to not focus on what has changed, but what the potential of the investment can be. In the end, that is all that truly matters!
Need help calculating what the cash flow of your deal can be even with higher interest rates? Learn how to analyze deals here.