FEATURE
Building Long-Term Wealth with a 30-Year Fixed Rate Loan By Grayson Wester, Corridor Funding
W
ith rising home values
qualified 30-year mortgage on an
put a real estate investor in a bind
and strong demand in
investment home from a bank isn’t
as they move from a short-term
many markets across
always easy. A bank wants to ensure
renovation loan to conventional long-
the country, real estate investors are
that your loan is secured with your
term financing.
shifting their strategy for building
personal income, even if you already
long-term wealth from fix-and-flip
have rental income that offsets your
Loans Catering to Real Estate
to Buy, Rehab, Rent, Refinance and
payments on the loan.
Investors
Repeat (BRRRR).
That’s where a non-qualifying 30When it comes to a traditional
Year Fixed Rate Loan comes in. This
The first step to any successful
bank mortgage, your W2 income is
loan offers several advantages to
BRRRR investment is getting the
everything. That’s why bank loan
help BRRRR investors acquire, hold
financing you need to transition out
officers review your income, assets,
and rent residential properties.
of a short-term rehab or fix-and-
tax returns, credit history, debt-
flip loan.
Refinancing with a 30-
to-income ratios (DTI) and other
A Non-QM 30-Year loan is similar
year fixed rate mortgage is an ideal
documentation, and why they’re
in many ways to a conventional 30-
solution,
interest
less likely to approve your loan if
year mortgage from a bank. It’s fully
rates and the payment terms that
you’re newly self-employed or have
amortized like a 30-year bank loan,
allow investors to keep existing
inconsistent income.
with no balloon payments at the end
offering
lower
of the loan.
rental properties and continue to purchase new ones.
Another disadvantage to traditional bank loans is how much time it takes
But unlike a bank, the lender uses
The Downside of Bank Financing
to close. Traditional bank loans
only a few criteria to determine your
The only problem is that getting a
can take 3 to 4 months, which can
eligibility: the loan-to-value ratio
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