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5 Tips For Financing Investment Property in Jackson, Mississippi

December 14th, 2022

The job market in Mississippi is expected to be strong, with the number of jobs growing without the workers needed to fill them. BestPlaces reports that Jackson has a fairly low cost of living at 81.8, much lower than the national average of 100. Taken together, Jackson could be facing a population growth as more Americans are looking to get away from high cost of living communities. The housing market may be slowing for single family properties, but it’s a great time to look for an investment property in Jackson, Mississippi.

Improve Your Chances for Financing Your Investment Property

Financing investment properties like multifamily homes or apartment buildings is different from financing your own home.

1. Make a Larger Down Payment

Mortgage insurance won’t cover investment properties, so you will need at least 20% down. A larger down payment, 25% or even 30% shows the lender you’re committed to the investment. It also hedges their own losses.

2. Strengthen Your Borrowing Position

Of course, you’ll want a strong credit score to avoid paying additional points or fees to get good interest rates, but lenders want to see more. Showing that you have personal or investment-related reserves in the bank to last at least 6 months gives you an edge when you’re borrowing money for an investment property.

3. Tap Into Your Own Home Equity

If you own your home, you may be able to leverage your equity to get an investment property loan. A home equity loan may have a lower interest rate and better terms than a loan for the investment property, but if you lose the investment property, you’re putting your future at risk.

4. Look for Local Banks or Brokers

Neighborhood banks and local community banks often have a little more flexibility in lending than nationwide conglomerates. Still, your local bank will need to follow all regulations and want to do their own due diligence. In addition, local banks know the pulse of the market, so they can help you invest locally. Brokers may also have access to different types of funding options. Make sure to choose a reputable broker who is transparent and won’t hide any contract terms. You also need to do your due diligence in choosing a lender.

5. Get Creative

If you’re determined to invest, but don’t have the capital, there are other options. You could look into peer-to-peer lending or a business partner. Fix-and-flip properties may be another option to get started in the real estate market. Look for liquid assets that could give you access to cash, such as a life insurance policy. Bridge, or margin loans, are another type of loan commonly used in real estate for commercial properties.

Work With an Experienced Investment Property Broker

Buying an investment property in Jackson, Mississippi can help you get started on your financial goals. Find the right investment partner who will support you and provide good advice to take the right steps. Our team at The Estes Group knows the market and we follow trends closely. We can help maximize your investment with our experience and knowledge. Get in touch with us to learn more.

Call us at 601-362-9633 or contact us online for help when you want to buy investment property in Jackson, Mississippi or anywhere in Alabama, Tennessee, Louisiana, and across Mississippi.