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Apartment Loan 101
So you're interested in going into business as a property manager? Have you given any thought yet to you'll enter this potentially profitable market? Reality check-unless you've just inherited a large sum of money from a relative or are otherwise independently wealthy you're going to find someone to borrow from. This is where an apartment loan comes in. Before you visit the local bank or other lending institution, it may be wise to ask yourself how long you plan to own the apartment building or complex. Are you investing for the long-term? Answering this question will significantly influence the type apartment loan you should get. If you are planning to own the property for two years or less, most experts agree that an apartment loan with an adjustable rate mortgage (ARM) will be your best bet. Like the name suggests, an ARM is a loan will an interest rate that may change with time in accordance with various factors. ARM apartment loans usually offer a better initial interest rate than other loans to offset the risk of future interest rate changes. An interest rate ceiling that may be reset annually also protects the mortgage holder. If you plan to stay in the property management business for the long-term, you may want to look at getting a fixed rate apartment loan. A fixed rate loan guarantees the same interest rate over the life of the mortgage. Supposing interest rates are historically low at the time you secure the apartment loan, this type of loan will lock you in at the best rate possible. On the other hand however, if interest rates are historically high at the time of the loan, you might be stuck paying interest at a higher rate than you would have with another type of apartment loan. Another important question to answer before seeking an apartment loan source is the approximate cost of the property. This may seem like a no-brainer when looking for an apartment loan, but too many first-time investors just take the interest rates they're given without question. If the apartment building you're interested in is selling for over $500,000, a direct lending source or investment company can usually give you a better interest rate than most banks or credit unions. However, if you're looking at a smaller apartment building selling for less than $500,000, you may want to check interest rates at the local bank. With banks and other lending institutions anxious to provide you with an apartment loan, new loan options have emerged in recent years. Generally speaking, smaller banks and other lending sources like direct lenders have a greater degree of flexibility in what they can offer borrowers. In order to attract larger numbers of borrowers, many lenders now offer non-recourse. A traditional recourse loan means that the lender has claim on personal or corporate assets in the event of a default by the borrower. On the other hand, a non-recourse apartment loan means the lender cannot hold you personally liable if you fail to repay the debt as promised. The only recourse for compensation to the lender is to take the property you've pledged as security for your loan, but he cannot claim any other assets or money from you if you default. Whichever apartment loan option you decide on, it's important to be certain you understand the details. It's vitally important that you choose a lender that has both the experience and inclination to take the time to sit down with you and answer your questions clearly. Getting your apartment loan from a source you can trust will go a long way in helping you find success and enjoyment in the exciting world of property investing and management. Cameron Brown is an internet marketer specializing in investment property. For more information on securing an apartment loan, please visit SNC.
MORE RESOURCES: Rules that helped set real estate agent commissions are changing. Here's what you need to know SFGATE Top real-estate CEO sees decades of housing pain ahead: 'What the Fed did will have a 30-year tail on it' Yahoo Finance Landmark Settlement Breaks Up the Real Estate Cartel The American Prospect Five Ways Buying and Selling a House Could Change The New York Times Austin's housing market takes a chill pill Morning Brew Real estate commission change shakes industry's foundation University of Miami: News@theU Rules that helped set real estate agent commissions are changing. Here's what you need to know The Associated Press Local real estate agents face uncertain future with new negotiation rules WJHL-TV News Channel 11 The Realtors' Big Defeat The New York Times Central Texas housing experts talk impacts from $418M real estate settlement - 25 News KXXV and KRHD Central Texas housing experts talk impacts from $418M real estate settlement 25 News KXXV and KRHD What National Association of Realtors agreement means for Texas real estate KAMR - MyHighPlains.com CrewBaltimore’s mission to accelerate women’s success in real estate Afro American Newspaper Investigation underway after 44-year-old real estate investor seen on video firing shots off boat docked at Lakeview ... WSVN 7News | Miami News, Weather, Sports | Fort Lauderdale National lawsuit could shakeup housing market, cut into real estate agent commission 11Alive.com WXIA A luxury agent on how the NAR settlement will change his business The Washington Post What Seattle-area homebuyers should expect after national settlement The Seattle Times Settlement will affect Iowa homebuyers KCCI Des Moines H2 2023 Global Real Estate Report PitchBook News & Analysis The Best Places to Retire in Florida Real Estate Swimmo Invest Opens up a New Chapter in the Real Estate Industry Markets Insider Cities Face Cutbacks as Commercial Real Estate Prices Tumble The New York Times New rules on real estate commissions could change the housing market game LehighValleyNews.com Illinois real estate: Home sales in Peoria, Tazewell, Woodford counties Peoria Journal Star Investigation underway after 44-year-old real estate investor seen firing shots off boat docked at Lakeview home in ... WSVN 7News | Miami News, Weather, Sports | Fort Lauderdale Realtor group will pay $418M to settle commission lawsuits The Associated Press Once America's Hottest Housing Market, Austin Is Running in Reverse The Wall Street Journal Chicago Voters Face Choice on Tax to Fund Homeless Programs The New York Times Foreclosures Are Rising—Especially in This One State—but Not for the Reason You Might Think - SFGATE Real Estate: March 4 to March 8 Newport This Week Real Estate Roundup: 240-acre farm near Orlean sells for $1.9M and more Fauquier transactions Fauquier Now Realtors Reckon With a Seismic Shift to How They Get Paid The Wall Street Journal Israeli real estate event: Legal complaints escalate NorthJersey.com Is real estate the best investment in 2024? Racine County Eye REAL ESTATE | Kewaskum Police station moves to temporary location | By Chief Tom Bishop washingtoncountyinsider.com Austin real estate: Holt Lunsford plans first area project The Business Journals Changes could be coming to fees related to home buying process Fox 46 Charlotte What the death of the 6% real estate commission means in D-FW The Dallas Morning News Rules that helped set real estate agent commissions are changing. Here's what you need to know News10NBC Bay Area Real Estate Executive Charged with Wire Fraud, Identity Theft in Investment Scam - Hoodline Real estate commissions, unassailable for decades, could crumble after landmark settlement The Denver Post Is the Era of the Celebrity Real Estate Agent Over? Industry Reacts to Settlement That Could Slash Commissions Hollywood Reporter China's Real-Estate Market Just Set a Record—but Not a Good One The Wall Street Journal The NAR Settlement's Impact On Commissions And Home Prices Financial Samurai Checking In on Dallas Real Estate The Dallas Express National Association of Realtors Agrees to Slash Commissions to Settle Lawsuits - The New York Times Real estate lawsuit settlement upends decades-long policies that helped set agent commissions WQAD Moline Real estate lawsuit settlement will affect Orlando agents - Orlando Business Journal The Business Journals Major Changes to Real Estate Business erienewsnow.com Realtors Reach Settlement That Will Change How Americans Buy and Sell Homes The Wall Street Journal A commission settlement may affect housing market 9News.com KUSA |
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