A line of credit is an important way for many enterprises to secure needed funding. It is arranged through a financial institution to borrow up to a specified limit and then the amount borrowed can be repaid. Funds can be used and repaid in a revolving cycle. It is flexible because the funds can be used at any time like an open-ended credit account and the borrower will only pay interest on the funds used.
Advantages of an Investment Property Line of Credit
The advantages include:
• Tax benefits on the interest paid.
• Generally long repayment term.
• A relatively low interest rate.
• Rapid access to cash.
Investment Property Line of Credit Uses
Investors can use an investment property line of credit to:
• Purchase a turnkey property.
• Rehab a property in an existing portfolio.
• Purchase and renovate a new property.
• Fix and flip a property.
How to Get a Line of Credit for an Investment Property
There are two types of investment property lines of credit. The first type is for investors who want one line of credit on a single investment property. The second type is for investors on a portfolio of properties.
Borrowers will need to meet minimum credit score and equity requirements. The selected lender will also evaluate the borrower’s debt-to-income ratio. Qualifying for a portfolio line of credit will also require a review of the investor’s overall financial condition including assets, salary, and investments.
To get approved for an investment property line of credit:
• Select a lender who understands investment properties, not just a general lender.
• Choose the right line of credit, depending on your financial needs and goals.
• Assemble all the required documents.
• Apply for the funding.
Seek Expert Financial Assistance
Contact Northgate Capital Finance for financial solutions to address your capital needs. Our experienced financial professionals can help you secure funding to meet your business’s financial needs and goals.