Real estate investing as a serious option compared to other investments in the world such as a 401(k) or cryptocurrency or stock market or a 1031 exchange. You don’t have to always sell to buy your next property. Maybe renting makes a lot more sense. What are the ups and downs, and the nitty-gritty details when it comes to renting some thing I don’t talk a lot about in this podcast, but we certainly could here’s a few examples and strategies. 1. Fixed-Rate Mortgage: This type of mortgage offers a fixed interest rate for the entire term of the loan, typically 15 or 30 years. Pros: Predictable payments, protection against rising interest rates. Cons: Higher interest rates compared to adjustable-rate mortgages (ARMs), less flexibility if rates go down.
2. Adjustable-Rate Mortgage (ARM): An ARM offers a lower initial interest rate that can adjust up or down periodically over the life of the loan. Pros: Lower initial interest rates, potential for lower payments if rates decrease. Cons: Uncertainty about future payments, potential for rates to rise and payments to increase.
3. FHA Loan: This type of loan is insured by the Federal Housing Administration and requires a lower down payment compared to conventional mortgages. Pros: Lower down payment requirements, flexible credit guidelines. Cons: Mortgage insurance premiums for the life of the loan, limits on loan amounts.
4. VA Loan: This loan is guaranteed by the Department of Veterans Affairs and is available to eligible veterans and active-duty military members. Pros: No down payment requirement, more lenient credit requirements. Cons: Funding fee, limits on loan amounts.
5. USDA Loan: This loan is available to homebuyers in rural areas and is guaranteed by the United States Department of Agriculture. Pros: No down payment requirement, lower interest rates. Cons: Income and property eligibility requirements, potential for longer processing times.
6. Jumbo Loan: This type of loan is used for high-priced homes that exceed the conforming loan limits set by Fannie Mae and Freddie Mac. Pros: Ability to finance larger loan amounts, potential for lower interest rates with a good credit score. Cons: Higher down payment requirements, stricter credit and income requirements.
7. Interest-Only Mortgage: This type of mortgage allows borrowers to pay only the interest on the loan for a set period of time, typically 5-10 years. Pros: Lower monthly payments during the interest-only period. Cons: Balloon payment due at the end of the interest-only period, potential for negative amortization.
8. Reverse Mortgage: This type of mortgage is available to homeowners age 62 and older and allows them to borrow against the equity in their home. Pros: No monthly mortgage payments, ability to access home equity. Cons: High fees and closing costs, potential for reduced inheritance for heirs.
9. Bridge Loan: This type of loan is used to finance the purchase of a new home before the existing home is sold. Pros: Ability to purchase a new home before selling
