Use a Fix and Flip Loan to Help Invest in a Property
You have probably heard the term “flipping a home”, which basically is a process that involves purchasing a property that is in need of some repair, renovating or “fixing up” the home, and then selling it again for a profit. This type of investment can be a great way to earn a supplemental income, but sometimes it can be challenging to come up with the initial funding that is needed to finalize the purchase. If you are interested in investing in a property in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, Foundation Mortgage is here to help. Continue reading to learn more about using a fix and flip loan to help you purchase and renovate a home.
How Fix and Flip Loans Work
Fix and flip loans are short term mortgages that help a borrower buy and then make improvements to a property, which is typically resold afterwards for a profit. These loans can include the cost of upgrading and repairing the home, and can be used to buy homes that have been foreclosed on or that are at auction. There are a wide variety of fix and flip loans available, such as bridge loans, hard money loans, home equity loans, HELOCs, etc. so you will want to work closely with your lender to determine the fix and flip loan that suits your situation the best.
What Are the Benefits Of A Fix And Flip Loan?
Fix and flip loans can offer several advantages for a borrower. Getting loan approval for a fix and flip loan takes a relatively short amount of time and you are able to get loan approval even if the property is in poor condition. Because the terms of a fix and flip loan are usually shorter than those of a traditional loan, a borrower is not required to pay a penalty if they pay off the loan early. Additionally, there is less risk involved with a fix and flip loan since they are generally backed by the property and there is a minimized chance of losing the home since you can take ownership of the collateral.
How Do I Qualify for a Fix And Flip Loan?
When you apply for a fix and flip loan, a lender will want to make sure that you have the capability to pay the loan back and that you have a firm plan to remodel the home and resell the property. When creating a plan for your fix and flip project, you will want to estimate the overall amount that you will need for the cost of the renovation, as well as create a timeline of when the repairs will be completed. A borrower will need to prove documentation of stable income, and a decent credit score is required.
If you are interested in fixing and flipping a home in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, contact Foundation Mortgage today for a consultation.