Three Sources of Real Estate Financing

Understanding Real Estate Financing is an important first step for a beginning investor. Many new investors are held back by the lack of working capital, and the lack of knowledge about various sources of financing is one of the most common problems in the real estate market. However, acquiring capital is not impossible for people without a large amount of personal or business credit. Here are three common sources of financing for real estate. They don’t conform to the bank’s standards for creditworthiness and do not provide funds directly to the end-user.

Traditional Real Estate Financing: A majority of real estate investors finance their purchases from their own savings, which is the main source of real estate financing. Nevertheless, it is important to consider available funding sources before applying for a loan. There are four primary sources of funding, which include the buyer’s own money, financial middlemen, and the secondary mortgage market. The first source of funding is a bank. A person with a strong credit history will be best served by this method.

Large investors: The second major source of real estate financing is large investors. These investors are individuals or groups with large personal and business credit histories. These clients are usually not required to make a 20% down payment. They can utilize a piggyback loan to avoid paying jumbo rates. If you’re in need of real estate financing contact Funding4texas today!

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