By Jeanette Joy Fisher

Home Improvement Loans

Before you add a second mortgage to your home, check out the zero cost HELOCs (Home Equity Line of Credit). Well Fargo and other banks offer low interest loans with no costs, not even appraisal fees. The higher your equity percentage in your home, the easier the qualifications. You do need to know what's on your credit and to take care of any issues before you apply so you get the best interest rates. Also, if you have your payment automatically withdrawn from a Wells Fargo Bank account, you get a lower interest rate. Check to see if your bank offers this type of service.

Real Estate Investing Loans

Real estate investors frequently purchase houses using money from a HELOC for the down payment. The more you put down on investment property, the easier the qualifications and the lower the loan costs.

If a HELOC won't work for you, you still have other alternatives for financing investment property. Many real estate lenders have stringent finance requirements including a strong credit report, high scores, great income, and twenty percent down. However, we have found ways to get around these credit requirement hurdles.

Today, mortgage lenders offer relaxed credit requirements, some with only a five percent down payment needed. Ask your investor friends and real estate agents for referrals to lenders in your area who offer better financing options than the usual twenty percent down payment.

Low Money Down and No Money Down Financing

Another option for you is to purchase a vacation or second home. We bought our second home with a low down payment.  Transforming a HUD repo into a dollhouse was a pleasurable experience. After the renovation, we added a zero cost HELOC. Sugar Plum Cabin pays us to keep it! Plus, we used the money to buy another doghouse.

Some investors achieve wealth by partnering. We just bought a huge Victorian style home with no down payment by using our son's credit. At closing, he even got a big check to pay for renovation and six months of mortgage payments. He was able to do this because his credit score is in the mid 700s. But, he still attends college and has no job!

If you're looking for home improvement loans or income property finance, check your credit and explore your loan options. You can save a significant amount of money on loan costs by shopping around.

Copyright © 2005 Jeanette J. Fisher. All Rights Reserved.

Read  How to Help Your Teen Prepare for a Strong Financial Future (What Schools Should Teach About Credit)

For Help With Mortgage Financing, see our Credit Teleclass.