How To Finance a House Hack | 5 Loan Types You Can Use to House Hack

The power of a house hack is that you can put a low down payment, i.e. a (more) affordable way to purchase a property.

What is up everybody my name is craig curlop aka the phi guy and i’m here to teach you about financing your next house if you watched my previous video about how powerful house hacking can be you’d see that really the power in it comes with these low percent down loan options that pretty much any bank will allow you to do and so in this video i wanted to show

You what my favorites are and for what type of properties and hopefully you can take some value and this will help you decide on which loan product to go with of course talk with your lender he’ll be able to give you more specified advice but happy to help here so the first type of loan you can get is a three percent down conventional loan now what that means is

Exactly what it sounds like you put down three percent down payment and it’s a conventional loan now there is still pmi anytime that you buy a property for less than twenty percent down you’re going to pay pmi however it’s three percent down there’s not as many contingencies and as many crazy things as an fha loan would be so it’s very easy to do and sellers

Do like this type of loan product so you know it’s not like with an fha you know you’re gonna need to maybe come in a little higher three percent can that three percent down conventional is very good however the one caveat is is that you know house tax can be anywhere from one to four units the problem is is three percent down conventional only work for single

Family so if you’re going to do a rent by the room method a luxury house hack or perhaps kind of you know split a split a single family and rent out the downstairs then we are able to do a 3 down convention so this is really for single family residences and normally these are only for first-time home buyers at three percent however there are some lenders out

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There that can do you know second third fourth properties at this three percent down many other lenders however require on your second property and more you have to do five percent down it’s the same exact loan type same type of same type of stipulations and all that good stuff but you gotta pay five percent down instead of the three percent down again this is

More for single family on multifamily really the only thing you can use is the fha which we’ll get to next so this here single family residence 3.5 down fha this is one that you’ve probably heard of before it’s the most common in a traditional house hack which is when you get a duplex triplex or quad live in one part rent out the other and this can only this

Can be used for one to four units however these two can only be used for single family so i would recommend if you’re going to buy a single family you might as well use one of these two that way when it comes time to buy your first multi-family this one is still open the downsides to fha is that you can only have one fha alone out at a time so if you purchase

A say a duplex with an fha loan you’ll need to get enough equity to refinance it into a typically a 25 down conventional loan if you don’t want to live there again for another year so this one really works best the fha really look works best for the two to four unit properties if you’re not going to go two to four unit again i really recommend you going with

One of these i actually had an fha on my first property that was actually kind of my mistake i went after a duplex and i had to wait three years to refinance it i just refinanced it just a couple of months ago you know i would think it was like august of 2020 and you know now it’s still cash flowing it’s still doing well and now i’ve got the fha loan out again

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But i was tied behind my back the only thing i could buy for the last three years were single family homes so don’t fall for that same mistake now this one here the next one is a zero percent down va loan so the va stands for veterans administration or veteran affairs i can’t remember but it’s for veterans is the main point here and it can be used for anything

From zero to four units however you have to be in the military and you have to i’m sure meet some sort of criteria when you’ve been in the military you’ll know whether you’re eligible for this or not but it’s a great product however there are some downsides right the appraisals for va loans are really tough and oftentimes the appraisers make the inspectors

Make the sellers fix up more things that than they would have on a conventional loan and so and sellers know this right so sellers don’t love seeing va loans so if you’re if you are going to use a va loan you may have to come in a little bit higher you may have to come in five ten fifteen thousand dollars higher than what you would originally have been asking

And then you might have to cover that difference in case you know the appraisal does come in low at the end of the day if you’re buying a four hundred thousand dollar house like you might be in denver and you’ve got a 10 000 appraisal coverage you know you’re still buying a house for you know two and a half percent down or maybe even a little bit less still

Crazy good right but that’s kind of like the worst case scenario with the va loan so this does work for one to four but you need to be a veteran need to be a veteran and so the last one i want to talk to you about is the usda loan zero percent down usda and yes it is the same family same group of people that grade your meat are going to be the ones giving you

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This well believe it or not and these people this is for rural properties so if you live in denver or you live in a great metro area you don’t need this this product is not for you but if you do live out in the boonies somewhere zero percent down they’ll people will incentivize you to buy a home out in the boonies and these properties you know they are you

Typically very good cash flow if you can find the renters available so yeah this one is for boonies i guess we’ll just do more on the more pc word i suppose so yeah zero percent noun usda so i mean that’s it guys right there’s there’s there’s really an infinite amount of loan products out there that you could use i would say the these four here are the most

Common that i’ve seen and if you can even lump these into one so it’s conventional fha and va are the three most popular that i’ve seen again talk to your lender see what’s best for you but if you’re on your first one and you’re going to get a single family i recommend these ones if you want a 2-4 unit i recommend the fha and if you’re a veteran just do the

Va it’s going to be worth it for you uh so i hope you guys enjoyed this video if you liked it please you know give me a like give me a comment a thumbs up let me know what you do hit that follow button in the top right corner and please please please just let me know i’m so excited to be here for you guys and yeah we’ll see you on the next video you

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How To Finance a House Hack | 5 Loan Types You Can Use to House Hack By RentRedi