When looking to make a large purchase, some are able to make it with cash (outright purchase), while others don’t have the entire funds at all once. This is where financing a purchase can be beneficial, as it allows you to borrow money to be able to make the purchase.
The real function of financing in a real estate investment is the ability to leverage your initial capital to purchase one or several investment properties. This allows you to spread the purchase cost over time for a set percentage of interest. Depending on your risk tolerance, the benefits of utilizing financing could be very beneficial when considering the returns on your investment.
An agent will usually offer you the option of a lender; usually a bank, a third party, or in-house financing. It is wise to get multiple options to compare the interest rates being offered. One should also consider the credibility of the lender, as well as the expert opinion of a real estate agent.
