Investment property lines of credit are short-term financing options which are generally used by investors who occupy properties without actually owning them. The line of credit will be for a pre-determined amount, which can be drawn upon by the investor much like a revolving credit card, so that interest is only paid on the amount withdrawn.
Types of Property Lines of Credit
The first type of a property line of credit is a single investment, which is meant for investors seeking a line of credit on a single property. The other type of line of credit is one which is taken out on an entire portfolio of properties, and which generally exceeds amounts of $1 million.
How to Obtain Property Lines of Credit
A line of credit can be obtained on investment property from credit unions, banks and in some cases online lenders as well. The first place to start is by calling the line of credit department for whatever financial institution you’re working with, and let them know that you’re applying for a line of credit on an investment property, so you can make sure that they have an appropriate loan product to cover that.
When you are preparing to apply for an investment property line of credit, you need to start by choosing the right type of line of credit, and this will be based on your financial goals as well as your investment properties. If you have a single property with at least $100,000 worth of equity invested, a single-home investment property line of credit would be the right product for you.
If you own a whole portfolio of properties, then a portfolio line of credit would be more appropriate. After having decided on the line of credit type, you’ll need to gather up all required documents like proof of ownership, lienholder data, and all other property-related documents. Then you can apply at either a traditional lending institution or online, with an online application being by far the fastest and easiest way to apply.
Could Your Business Use a Line of Credit?
At Affinity Capital Funding, we make it our business to help your business succeed, and if a property line of credit is a vehicle you could use to grow your business, we might be able to help. Contact us today so we can explore some possibilities on a line of credit for your company.