Real Estate Investing Investment Property Financing 2

Question 1

What is the typical minimum down payment required for a conventional investment property loan?

Accepted Answer

20%

Answer

5%

Answer

10%

Answer

15%

Question 2

A DSCR (Debt Service Coverage Ratio) loan qualifies borrowers primarily based on:

Accepted Answer

The property's rental income relative to its debt payments

Answer

Personal credit score only

Answer

The borrower's W-2 income

Answer

The borrower's net worth

Question 3

Which loan type is BEST suited for an investor who wants to purchase, renovate, and quickly sell a property?

Accepted Answer

Hard money loan

Answer

30-year fixed mortgage

Answer

FHA loan

Answer

USDA loan

Question 4

What does it mean when a lender 'calls' a loan?

Accepted Answer

They require the full balance to be repaid immediately

Answer

They lower the interest rate

Answer

They extend the loan term

Answer

They convert it to a fixed rate

Question 5

An investor uses a blanket mortgage to:

Accepted Answer

Secure multiple properties under one loan

Answer

Finance a single luxury property

Answer

Refinance a primary residence

Answer

Fund property improvements only

Question 6

What is a 'non-warrantable' condo and how does it affect financing?

Accepted Answer

A condo not meeting Fannie/Freddie guidelines; harder to finance conventionally

Answer

A condo needing repairs; qualifies for FHA only

Answer

A condo over 20 stories; requires jumbo financing

Answer

A newly built condo; eligible for first-time buyer programs

Question 7

Which of the following is an example of 'creative financing' in real estate investing?

Accepted Answer

Seller carrying back a second mortgage

Answer

Getting a 30-year conventional mortgage

Answer

Using an FHA loan on a rental

Answer

Applying for a HELOC on a new purchase