What Else Do I Need to Know?
You really need to be involved in every aspect of your transaction. Of course, some things will have greater bearing on your success than others.
You definitely need to know how your up-front financing works. The vast majority of rehab real estate investors use private funds or hard money to purchase their property. But, depending on the lender, the programs vary. Make sure that you know your interest rate. What is the term of the loan? Are there any pre-payment penalties? Do you have to make mortgage payments during the life of the loan? If so, how much are they? These are questions that you need to know the answers to. A reputable lender will go over all of this information with you. However, it is your responsibility to make sure that they do. You also need to make sure that you remember what you agreed to. You shouldnt allow yourself to be surprised later by something that was explained to you at the outset. Something else that we recommend is that, if you plan to refinance your property, that you get qualified for your refinance at the same time that you get qualified for your purchase loan. Why? Because you want to make sure that you will be able to refinance and get out of your loan. Remember, if your goal is to do a cash-out, you need to make sure you will be able to do so.
You also need to make sure that you stay in touch with your mortgage broker throughout the process. This way, if anything changes, you will know about it right away. For example, you can make sure that you know what programs that your mortgage broker has, and what you qualify for. There may be a new program that comes out that is more advantageous for you, or the program that you may have thought you were using may no longer be available. Either way, you need to be informed of all of your options.
By the same token, if anything changes about your financial or employment situation, you need to let your mortgage broker know as soon as possible. The changes may not affect your ability to close on your refinance, but they may. You may have to pursue a different strategy, and it is good to know this in advance, rather than at the last minute.
This Actually Makes Sense.
Yes, it does make sense to be informed when you are purchasing an investment property (or any major purchase). But remember, you should be proactive, as well as informed. Legitimate businesspeople will not have a problem with you asking questions or being involved. In fact, we welcome this. It shows that you are concerned, involved and take responsibility.
While everyone involved in the process does what they can to ensure that everything runs smoothly, this is not guaranteed. But, if you remain involved, there are few surprises and you are well equipped to handle anything that does come up.
Because, at the end of the day, this is your property.
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