Housing values are rising, so this is a potentially good time to take your first venture into real estate investing.
Advice on how to invest can be found from a variety of sources, including online investment websites and financial advisors such as JP Morgan wealth management. Below are a few nuggets of advice on how to make the most of your foray into the housing market.
What kind of property do you want?
Do you want to buy a starter home? Are you looking for a condo? How about an investment property? Determining your goals is an essential first step.
If you are seeking your first home, the next step is to determine whether you are looking for a single-family home or an apartment. After this, you need to ask yourself how much of a risk you are willing to take. Do you want to pay lower prices for a fixer upper? Or do you want a property in a hot real estate market such as San Francisco or New York?
Is your credit good?
Whether applying for a personal loan or otherwise, your credit score is always one of the first things lenders will look at. Generally, in order to get a loan for investment property, you’ll need a strong credit score of over 740 and maintain low levels of debt in comparison to your income.
However, even if your credit score doesn’t measure up, you still may be able to obtain a low-interest loan by paying extra fees such as a bigger down payment. If you’re looking to buy a home as your personal residence, the standards will be lower, and there are federal programs which can help you out if your credit score isn’t up to par.
How much down payment can you afford?
If you’re buying your own home, a down payment of 20 percent is advisable to receive a standard loan. If you want a lower interest rate, it’s best to pay even more up front, even up to 25 percent.
However, if you’re looking to buy your own home and can’t afford 20 percent down, there are government programs which help out borrowers who can only afford minimal down payments. Your best bet though is to start saving as much as you can for your down payment when you first decide you want to become a homeowner.
Look out for the little things
When you’re looking to buy real estate, don’t discount how much it will cost. In addition to the down payment and monthly mortgage, you’ll have to pony up closing costs, property taxes, insurance fees, and costs for repairs. This is in addition to costs for water, lawyer fees, utilities, and various other expenses.
It’s wise to determine to factor these expenses into your total costs before you even start looking for specific properties.
Investing for the long haul
Real estate investments are a solid way to start building wealth. Financial advisors and wealth management companies such as JP Morgan wealth management can help you get there.
Planning and research go a long way to ensuring that you purchase the right property at the best rates and that you ultimately turn a profit from your real estate.
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