Finance Information

Most people I work with are interested in purchasing a cabin to put on overnight rental. Rental Cabins are financed pretty much like any other house. In theory, if your credit and income level are sufficient, you can get a loan from any mortgage company that will loan on property in this area. One common financing option is to get up getting an investment loan. These usually have a slightly higher interest rate than a mortgage on a “normal” house would, but they will also usually take into consideration that you will be getting some income out of the property, so it helps you to qualify for a larger loan than you otherwise could.

You should really decide what your goal is before you decide on how you are going to finance it. If you want your cabin to cash flow, then you should consider putting as much money as you can stomach. The more money you put down the better the chance of cash flowing. As you finance more of the purchase price, it will take more to cover your mortgage, and the lower the chance of you covering your monthly expenses and coming out with cash in your pocket.

If you have a bank or finance company that you have worked with in the past, you may want to see if they can loan on properties in this area. Sometimes you can get a better deal if you are a repeat customer. There are also many mortgage companies and banks in this area are familiar with the local rental market, so they may be more likely to loan you money than someone that does not understand the market in this area.

You do not need to be pre-approved for financing before you begin the process of looking for the perfect cabin, but it can certainly help. First, It will ensure that you know how much you can afford, so you do not waste time looking at house that are out of your price range. There is nothign more frustrating than finding the perfect house, negotiating a good deal, and then discovering that you can not quite get the money together to purchse. Even more important, once you find a property that you would like to buy, being pre-approved can help any offer you make seem stronger to the sellers. They are often more likely to accept a lower price, if you can provide a pre-approval letter with the offer. Who doesn't like to get a good deal?