Flipping houses is something that a lot of people have found great success with. If you're good with your hands and have some experience in contracting and construction, you're well on your way to preparing for your first flip. One thing that stops a lot of people from taking advantage of flipping is getting the financing for their first flip. That's where Fix and Flip Loans come into play.

What is a Fix and Flip Loan?

This type of loan is specifically for investors looking to flip a house. It is usually a short-term loan with fair interest rates and quick approval. This will not be like your traditional mortgage where you can finance the home for 25 years and then take your time getting the work done – it's for a fast flip.

How long can you finance with a Fix and Flip Loan?

The length of the loan will vary from offer to offer, but generally speaking, you'll get 18 months of financing to fix up the house and get it sold. Some loan offers may extend the length and some may shorten it – you'll have to read the terms and conditions of each offer you receive.

How much are the payments on a Fix and Flip Loan?

Unlike a traditional mortgage, the payment schedule is a bit different. A lot of times, you will not pay the balance of the loan – you'll pay the interest on the loan, not the borrowed money itself. How much interest will vary from offer to offer. Your credit history will impact the interest rate, as well as the amount that you're requesting, the value of the property, and the length of the loan.

Can you repay a Fix and Flip Loan early?

In most cases, yes, but again, you'll need to read the terms and conditions of the offer. Some companies encourage early payoffs, others don't. If you think that there's a possibility that you'll get the job done sooner than expected, make sure that there are no early repayment penalties on the loan. If there is, look into another offer or negotiate with the lender.

How much can you borrow on a Fix and Flip Loan?

On average, you'll be able to borrow roughly 90% of the loan to cost. This means you may be able to borrow 90% of the money that you'll need to buy the house, make the repairs, and get it listed.

Take your time finding the loan offer that will meet your needs and your budget. Hopefully, your first flip will go off without a hitch.