Your bank should be your last option when purchasing your first investment real estate property.
Most people think of their bank as their only choice as a mortgage lender when they purchase their first investment real estate property; this is far from the truth.
Understand there are multiple types of financial institutions; review list below.
Types of Financial Institutions:
- Commercial Banks
- Investment Banks
- Insurance Companies
- Investment Companies
- Management Investment Companies
- Credit Unions
- Shadow Banks
- Personal – Non-Family
Which Type of Lender Should You Use for Your First Investment Property?
I recommend you find an investment real estate lender who specializes in the world of investment real estate.
I always suggest you make your bank your last bank to use. Why?
If you are reading this blog investment real estate may not be in your financial portfolio, but you are giving investment real estate some thought. Each lender has their own set of rules, and many of the traditional mortgage lenders will lend you money for investment real estate. These conventional lenders have limits to how many investment real estate mortgages they will finance for you.
Remember if you are buying investment real estate you are in a small group of investors.
Double Down On Your Personal Banking Strategy
In my blogs, I will introduce value bricks in helping you build a strong financial foundation. These value recommendations are designed to have a long-term positive impact on your wealth accumulation portfolio.
If you are in a long-term relationship or marriage, I would like you to double down on your banking situation. In today’s households most partners are working; to double down create joint accounts at separate banking institutions; start building relationships through these banking institutions. Set up a chequing, savings and a primary credit card through one or both of the banks; ie. Visa with one banking institution and Mastercard with another. Most employers have direct deposit of your paycheques; recommend one partner’s paycheque go into one bank and the other partner’s paycheque get deposited in the other bank.
Do my wife, and I use this strategy; you bet, and we have for 15 years.
With both of your names on the chequing, savings and credit cards with each bank you are doubling down, and both of you are creating credit with both of these institutions.
Next Step at Your Bank
Do you need to ask your bank what is the number of investment real estate mortgages they are prepared to lend you?
Yes. And Why?
Going to your bank might be the easiest way for you to get a home mortgage however you might create conditions with your bank that limits you from getting more mortgages from your bank.
Remember investment real estate is a long-term financial strategy.
You can see why I would love you to double down for your banking needs.
Having two central banks gives you opportunities to learn about how each bank runs their operations, and you get to learn about how they handle their mortgages especially in the area of investment real estate mortgages.
Getting a personal mortgage with your bank might work against you; don’t want to give up what might be your most accessible and easiest mortgage to acquire.
What’s the real investment challenge here for you?
Don’t let it be you.