As a real estate agent you need to know the products out there for the buyer. I mean loan products. Everyone and anyone could buy a home during the heyday! Now it’s very limited. There are really only a few loans:
#1 - The government regulated (Fannie Mae/Freddie Mac, FHA, VA)
#2 - The In-House loans (credit unions and local banks)
#3 - Lastly “Hard Money”.
The government regulated loans are regulated - heavily. The banks and underwriters are worried they may approve a loan incorrectly and get pounced on by the regulators. This will most likely relax in the coming months and years.
Some in-house loans are being done by credit unions and banks. These are not regularly done by Fannie/Freddie or FHA or VA. They are irregular loans such as lots of acreage, farms, etc. Local knowledge is really needed for these types of loans.
Hard money is something that is coming into its own. There were two articles written recently about hard money in the Wall Street Journal. As a Realtor I say “thank goodness” for Hard Money. There is little bureaucracy, deals can be approved and closed in just a few days. There’s no red tape. The parties involved in hard money are the lender (private investor normally a person who lives in the community), the broker (hard money has to be done through a broker per numerous State and Federal laws) and the borrower.
Hard money can be used to purchase or refinance a dump property, bad credit borrower, irregular income borrower, large cash out borrower, Bridge loans,etc. Hard money is a higher interest rate loan, usually 12% interest and you have to have equity in order to qualify, but then down the road one can refinance.
The housing market values are only going up and current prices are too good to miss out on…every once in a while the Realtor needs to send their buyer to a hard money broker to help get them into their new home.
And that’s why I say, “thank goodness for Hard Money Lenders!”
Lynn Tardibuono, Realtor, Co-Owner and Flipper Chick - Has helped many, many Buyers get into their new home by way of Hard Money loans. She is a CA Realtor with more than 24 years of experience in real estate and lending. Her phone number is (707) 523-2099. See website @ www.sunpacmortgage.com. DRE license #01014873 & NMLS #289456