Question:

Should I get a no down payment real estate loan for investment property?

Answer:

You could get a no down payment real estate loan for any type of property, and many people would do it. However, the risks of endangering yourself and your rental home are greater than taking a no down payment real estate loan for primary residence.

Why getting a no down payment real estate loan for investment properties is not always recommended?

If you are getting properties with the single purpose of fixing them and selling them for profit, the no down payment real estate mortgage is investors' favorite. The less of your own cash is tied in the transaction, the better.

However, if you are buying rentals, the mortgage payment on a rental property bought with no down payment mortgage can be more than 40% higher than the payment on a mortgage with 20% down. Isn't this a payment shock to the investor?

Shortly, the no down payment real estate mortgage loan can be a good choice in some cases and devastating in another. If you are buying property for quick resell, 100% financing is the best go. Buying to rent can thin your pocket if you use the no down payment option.

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