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Whether you are looking to purchase a duplex or make home improvements, financing is available. Financing a duplex can be a long term investment that creates family wealth and generates passive income. A duplex with five or more units is usually classified as commercial real estate. Commercial real estate loans can be more difficult to secure and can require bigger down payments. In most cases it requires less down payment to finance an owner-occupied duplex. Most owner-occupied mortgages can be secured with as little as 3.5% down. Keep reading to learn more about how to secure the best duplex financing.
How do you finance a duplex?
If you are purchasing a 2-unit duplex or 3-4 unit multifamily home you should be able to use a residential mortgage. Financing terms can be more favorable if you plan to live on the property. If you live on the property and rent rooms or units you should qualify for an owner-occupant mortgage. In most cases, owner-occupant mortgages have lower down payments and interest rates compared to conventional financing. Conventional financing is usually used if you are looking to purchase a duplex or multifamily home as an investor only. If you have credit challenges or are lacking a down payment you should look into using a personal loan to finance a duplex. Some of the most common loans for financing a duplex include…
- FHA Loans
- VA Loans
- Conventional Loans
Can you buy a duplex with a conventional loan?
Yes, you can buy a duplex with a conventional loan. In most cases, conventional loans are used when you purchase a duplex as an investor only. This means you do not plan on living on the property.
Is it a good idea to buy a duplex?
Buying a duplex can be a great idea and even better investment. Not only does buying a duplex give you home security it can provide income. Buying a duplex or property can create family wealth and give you an asset to pass down from generation to generation. People will always need a place to live. This means that having rental property is a valuable long-term appreciating asset.
How much should you pay for a duplex?
Location has just about everything to do with what you should pay for a duplex. For example, In San Diego, CA most duplexes are offered between $500,000 to $800,000. Compared to places like Texas and Florida, duplex prices in San Diego are much higher. In addition to location, condition and curb appeal are also heavily factored into the price. Although the duplex may cost more in San Diego it’s an extremely desirable place to live with a booming rental market.
How much money do you need to buy a duplex?
If you are purchasing a duplex as an investor with no intent to live on the property you may need 20% to 30% down. However, if you are purchasing a duplex with intent to live on the property you may be able to put as little as 3.5% down.
Can you buy a duplex with 5% down?
If you are using an owner-occupant mortgage you can buy a duplex with 5% or less down on approved loans.
How can I get a duplex with no money down?
If you are using a VA home loan you can purchase a duplex with no money down. However, most residential mortgages require some amount of down payment. If you do not have a down payment you should look into a home equity line of credit or personal loan. Even though interest rates can be higher using a personal loan they are usually easier to secure. You can qualify for a personal loan up to $100,000 with no money down. In addition, all credit types can qualify for personal loans.
How do you legally split a duplex?
Some duplexes can be legally split with a property line running down the middle. However, some duplexes cannot be split. You should contact an attorney to determine whether your duplex can be legally split.
Is a duplex better than an apartment?
If you plan to live on the property a duplex can be better than an apartment. Duplexes give more of a home vibe. Some may even come with a private backyard or attached garage. In addition, most duplexes have ground-level entrances making them more desirable. If you are looking to purchase a duplex or apartment as an investor, you may make more ROI on apartments. It’s likely that you can secure more units and have less property upkeep on apartments.
In conclusion, securing an owner-occupied mortgage for a duplex can be one of the best financing options. Owner-occupied mortgages require that you (the owner) live on the property. If you are looking to secure an FHA loan for a duplex you can apply online through approved lenders or visit your bank or credit union. You can also reach out to friends and family for personal recommendations for lenders. If you are facing credit challenges or a lack of down payment a personal loan can be a great financing option for a duplex. Personal loans are a top choice for home improvement financing. If you want to secure a personal loan you can apply online with Acorn Finance. Acorn Finance is a reliable source for financial guidance and personal loan approvals.