Texas Hard Money Lender: How to Make Money With Texas Mortgage Loans

Investing in real estate is a great way to build your investment portfolio and make money. If you have bad credit, you may think that real estate investing is beyond your reach. However, there are several Texas mortgage loans programs geared towards bad credit borrowers. Finding the right program can help you qualify and start building your investment portfolio.

In Texas, it is a buyer’s real estate market. An increase in housing inventory combined with low prices make now the perfect time to purchase a home or investment property. Many sellers are willing to negotiate and buyers can get great deals. In addition, interest rates are low and approval for lender financing is up. The time to buy is now. However, if you have bad credit you may not think it is feasible to purchase a home, especially if you would be doing so as an investment property. This is simply not true. With a variety of loan programs to purchase first homes as well as investment properties, you can find a program that will work for you and your credit score.

Types of Texas Mortgage Loans That Can Help When You Are Eager to Start Investing

One program you will want to consider, particularly for an investment property, is an adjustable rate mortgage or ARM. An ARM is a loan that has a fixed interest rate for 1 to 7 years. The rate is usually quite low, often lower than the prime rate you would get with a traditional mortgage. This will keep your monthly payments low and helps borrowers with higher debt to income ratios or bad credit qualify. Keep in mind that once the loan term ends your rate will go up and so will your monthly payment. An ARM is ideal for an investment property that you are planning on owning for a short term, fixing up, and flipping for a profit.

Another Texas mortgage loans program you may qualify for, even with bad credit, is a hard money loan. A hard money loan is not backed by a bank, but rather a group of investors. Since the loan is not funded by the bank, the merit of the investment property is more important than you credit score. Hard money loans are usually short term loans designed to last from a few months to a few years. Be aware that you will usually pay a higher interest rate with a hard money loan but if the investment is worth it, this is negligible.

A third type of program that can help you qualify for an investment loan with bad credit is an FHA loan. An FHA loan is a loan that is backed by the federal government and you can qualify for the loan with a credit score of 580 and 3.5% of the purchase price down. If your credit is even lower, you can actually still qualify for an FHA loan with a score as low as 500 but will need to put about 10% down. The interest rate is fixed for the life of the loan so your payment will not go up drastically. If you are looking at the home as more of a rental investment (long term) than a short term fix and flip, an FHA loan may be a good option for you.

Other less common types of Texas mortgage loans that can help borrowers with bad credit are rent to own programs and seller financing. These are usually better options for a home that will be your primary residence, rather than an investment property.

Finding a Texas Mortgage Broker is an important first step in purchasing your investment property.

In order to purchase a home with bad credit, it is important to have a mortgage broker that will work for you. Ask your broker about his experience with investment loans as well as bad credit loans. The more experience he has, the more likely he will understand how and when to be aggressive with lenders to help fight for your interests. Many borrowers with bad credit may be automatically turned down for a loan by an automatic underwriting program based solely on their credit score. An experienced broker knows how to get the underwriter to manually review the application and take other factors, like income, investment potential, and savings into account to help outweigh your bad credit.

Stop letting bad credit keep your from investing in real estate. Find a broker today to start having your money work for you.