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The price of real estate in Sarasota has been on a steady recovery from the housing crash. This recovery is presenting a giant dilemma to investors. Many people can’t still decide whether is a good time to invest in real estate.

According to findings by National Association of Realtor, the price of homes rose to 85% in most areas. Only 14% of the urban areas reported a price decline in the first quarter of 2015.

real estate in Sarasota

The NAR cites low-interest rates and limited houses in the market as the factors that increase prices. The association predicts a steady growth of the sector across the country.

Although the interest low are low, it is difficult to secure investment loans. Even so, a little preparation and creativity can make it easy to access the loans.

Here are five tips that can help you secure that loan to finance an investment property.

Have a sizable down payment

The mortgage does not cover investment properties; you need a 20% down payment to secure a loan. Increasing the amount to 25% makes you eligible for better interest rates. Lower interest rates ensure a quick return on investment. It also allows you to pay off the loan quickly.

Be a strong borrower

Having a strong credit score goes a long way in getting you a good loan terms to invest in real estate in Sarasota. Other factors that influence the terms of a loan include the lender’s policy and loan to value ratio. A score that is below 740 can prove to be expensive. It might cost you more money to maintain the market rates. Failure to pay the points when your credit score is low means you have to pay higher interest rates.

Stay away from big banks

If you have a small down payment, consider getting a small community bank to finance your loan. Smaller banks are more flexible than the larger financial institutions. They also have a greater knowledge of the local property market and an interest to invest locally. A mortgage broker might be a good alternative in such a case, but you need to do you homework before engaging them.

Seek out recommendations from your friends and they will help you vet such lenders. Do not be afraid to inquire about a lender’s credentials as you verify them. Do they have a college degrees?  What is their background? Are they affiliated with any professional organizations? These are some of the questions that would form part of your due diligence process.

Ask for owner financing

Although asking for owner financing previously was not popular, these days it is acceptable. This comes in the face of tightening credit control. Not everyone is eligible to for a bank loan. But you would need to settle on clear and defined settlement terms. You have to convince the seller of real estate in Sarasota on your reliability.  In other words, you have to sell the seller on your ability to finance the deal and calm down their worst fears.

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