Property Financing: What Type of Loan is Best For Investment Property In Destin, Florida

Investing in property can be a lucrative venture, especially in popular tourist destinations like Destin, Florida. With its pristine beaches and year-round sunshine, Destin has become a top choice to purchase vacation homes and rental properties. However, before diving into the world of property investment, it is essential to understand the various financing options. If you are struggling with the question, “What type of loan is best for investment property?” keep reading.

Emerald Coast Real Estate Market Watch

The median list price for homes in Destin, FL, was $792,000 during October 2023. However, real estate data is always changing. Contact Mike Jones for help buying and selling homes on Florida’s Emerald Coast.

3 Things To Know Before Deciding What Type of Loan is Best For Investment Property

1. Loan Eligibility

Find out if you’re eligible for a loan in Florida before you dive into becoming a landlord. Different lenders have different requirements, but generally, in Florida, you will need the following:

• A down payment of at least 15 to 20% for single-family homes.
• If you want to buy a duplex or quadplex, prepare to put down 25% or more.
• A credit score of at least 620. However, some lenders may ask for a higher score.
• A debt-to-income ratio of 36% or less.
• Enough cash reserves to cover your mortgage payments for at least six months.
• An idea of the cost of repairs if you’re considering purchasing a fixer-upper.

Do your homework and meet these criteria before making big decisions.

2. Weigh Your Options

Which loan type is right for you? It depends on an array of factors. But don’t worry, you don’t have to figure it out alone! An experienced professional can lend you a helping hand and guide you toward the right decision.

3. Know the Types of Loans

There are many types of investment property loans in Florida.

• Conventional Loan: It is the traditional mortgage most people are familiar with. The best part of this loan is its low interest rates and low down payment options.
• FHA Loan: A government-guaranteed loan perfect for borrowers with less-than-perfect credit. However, the requirements typically exclude borrowers from using FHA loans to buy investment properties.
• VA Home Loan: A no-money-down loan available to eligible veterans. However, the restrictions on these loans typically make them ineligible for use on investment properties.
• Home Equity Loan: Allows homeowners to use the equity in their existing property as collateral for a loan. It can be a way to finance investing with lower interest rates.
• Hard Money Loan: These loans come from alternative lenders and often have higher interest rates and fees. However, they can provide quick financing when needed. It is usually a form of short-term financing.

Destin is a promising market for real estate investment, but you need to understand your financing options. Getting the right loan can be the difference between success and failure.

Are you interested in real estate investing in Destin? Click here to contact our team. We are experts in the Emerald Coast real estate market. Reach now to learn more about how we can help you achieve your goals.

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