If you are considering house flipping you will first need to be qualified for a house flipping loan. House flipping loans are referred to as Non Owner Occupied loans and having the loan structured the right way is critical to your house flipping success. If your main intention is to flip the house then you will want to make sure that your loan has no prepayment penalty.

Non owner occupied mortgage loans, also referred to as investment mortgage loans, are used for people who are in need of a house flipping loan. Not only do you want to make sure that the loan has no prepayment penalty but you generally want to make sure that you will be able to afford to make the monthly payment for a minimum of 6 months in case you are not able to sell the home as quickly as planned. This is one of the top reasons that "would be" home investors fail at flipping houses; They did not plan ahead to make sure they had enough money to cover monthly mortgage payments if the house did not sell quickly.

A negative amortization loan would be a good way to make sure you can afford the mortgage payment each month if you do not flip the house instantly. Negative amortization loans can have a minimum payment as low as 1% of interest.

 

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