It is best to plan the establishment of your portfolio. This planning may give you the ability to purchase more properties as it may provide you with a clear path and effective strategies to multiply the different ways to acquire properties. If you are a new real estate investor, we will do together the planning while keeping and building the following key points:
.Your Credit Profile
For a sophisticated investor or the professional landlord, the requirements are a bit different, if you fall in these categories, click here .
Let me take a few minutes to explain the key points for the new investor: The mentioned key points are crucial to every financial institution who offers to lend the largest personal loans given to a person.
Your Credit Profile
They want to see someone who has built a good credit profile which shows a historical of your past credit, any judgment against someone, the amount of credit that is available and uses this information to calculate the Total Debt Ratio (TDS).
The way you handle your credit, shows your character. In that credit report it will also show your personal wiliness to repay your debts, which translates to the degree of integrity you may uphold as a personal value. It also shows if you are a stable person; looking at how many times you have relocated in the last few year. They would love to hear that you as the borrower have taken the time to plan and save or have access to money for a sizable down payment, which shows good intent.
Your Financial Capacity
The financial institution will look at your business; other properties, revenues and expenses, as well as your personal income tax reports, your debts and will take in consideration if you are able to financially cover your personal expenses, including housing costs. They want to make sure that you are not over extending your capacity to repay all financial commitments.
Your capital is the down payment you have set aside/saved to put toward the purchase of your house. The financial institution will want to see how you came up with this down payment; did you budgeted for x number of years and put aside x amount of money to build this down payment, or are you borrowing from line of credit or credit card to come up with the down payment,or are you using vendor take back, or cashing in your stocks or bonds. However you accumulated the down payment it will be essential to provide proof of your claim with print out of bank statement and any other documents to support the origin of the money.
Here the lender will look at the type of property you wish to buy, the location of that property will be important because that will affect it’s marketability
(how easy it will be to resell if they end up to reclaim the property).
Planning to purchase a property is veryimportant. Call me to start and create you plan.
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