Financing property is a crucial step in owning your first property. You will likely go for real estate financing unless you have a lot of liquid cash. With several financing options available, it is expected that you get overwhelmed. You must be right with the choice, as financing property is a serious commitment that has a long-lasting impact on your finances.

Understanding the market and what kind of financial perks the property offers is a must to decide the type of commercial property loan you will require. We created this guide to help you choose the right option to finance the property you are interested in.

Check your credit reports

Before starting the investment loan application process, you should prioritise looking at your credit reports first to understand how healthy your credit is. Most federal banks will approve your loan only if you have a certain level of credit. Your current credit report will be pulled from one of three major credit bureaus: Experian, Equifax, and TransUnion.

Fortunately, it’s simple to check your credit reports. Just visit annualcreditreport.com and look at your credit reports. We recommend this website because it is the only authorised website by federal law to get your credit reports for free once yearly.

After you have access to your credit reports, have a look at if there are any errors or accounts that are listed incorrectly. Any errors can negatively impact your credit score, and any unidentified accounts on your report can indicate possible identity theft. If there are simple mistakes like incorrect details, you can report them directly to the bureau. While there is no way to dispute factual entries, you can discuss delinquent payments, too many credit inquiries, etc.

Poor credit scores can make getting investment loans from federal banks difficult. Still, you can try Nationwide private money lenders who work with borrowers to provide the best possible solution.

Improve credit score

If your credit reports are healthy, congratulations! You are one step closer to financing your property. However, if it could be better, you must take measures. Most conventional lenders find a credit score between 620 to 660 to be sufficient to lend on. Some federal banks can approve investment loans for credit scores as low as 500 if certain conditions are met.

Financing property is still possible with a low credit score. Nationwide private money lenders, like Simplending Financial, help people get the best real estate financing possible, however your primary focus must be to improve your credit. The two most impactful factors contributing to your score are payment history (which makes up 35% of your credit score) and the amount of debt owed (another 30%).

Before putting in your real estate investment loan application, it is recommended that you avoid putting too much onto your credit for a few months, as it can negatively affect your credit history.

Understand the types of real estate investment loans

A real estate investment loan is different from loans for residential properties. You must know which type of investment loan will be best suited for financing the property. Each loan type has its terms, rate of interest, and eligibility requirements. Decide which loan you need before applying with banks or private money lenders.

Borrowers who have established banking relationships can easily secure a bank-term loan. Getting an investment loan against your property is also possible, called a line of credit loan, and multi location businesses can apply for portfolio loans.

Get guaranteed real estate investment loans with Simplending Financial

If, for some reason, you are finding it difficult to arrange for a real estate investment loan to finance your property, we are here to help. Simplending Financial is one of the most reputable nationwide private money lenders. Check out their financial solutions portfolio to find the best loans to finance your dream real estate investment property easily.