Current Uses For Private Money - It’s Definitely Time To Be A Homeowner!

Current Uses For Private Money

It’s Time To Be A Homeowner

 

The busy Real Estate Agent working with Buyers in today’s market needs the following lender line-up.  1.  A 30 year fixed rate lender ([1]FNMA/FHLMC).  2.  An FHA and VA lender.  3.  A credit union for those that just miss getting a 30 year fixed rate loan.  4.  A Private or Hard Money Lender. And not necessarily in that order!

That is the current line-up to accommodate almost any Buyer for any residential property type.  Keep in mind that most Hard Money lenders typically will also do more than 4 units, commercial, land loans and construction loans.

 

The typical Hard Money Buyer will have 30% or more down and will be buying a home he will be living in or a rental property.  For someone buying a home they will occupy, they can spend up to 50% of their income for their house payment plus their other debts.  Hard Money is pretty forgiving on credit.  A person can have recent foreclosures, be in bankruptcy, done a recent short sale, have collections, liens, etc., or combinations of those.

 

Here is a real Hard Money Purchase Scenario and the Hard Money Loan Program for that Buyer: 

 

Buyers are selling their home on a short sale and have saved up all the payments they did not make on their home being sold for the past 11 months.  They had 2 rental properties that were foreclosed upon.  The home they are selling is in contract for $310,000.  They paid $605,000 for it in June 2006.  They owed $484,000 and their monthly payment including taxes and insurance was $3,614.  Their current lender would not allow a loan modification as they could not demonstrate any hardship.  Both the husband and wife work and they make pretty good money between them. 

 

Their favorite Real Estate Agent found them a home in their same neighborhood for $325,000.  The home had been recently remodeled.  They put 35% down and got a Hard Money Loan for $211,250.  The interest rate was 12% ([2]APR 12.698%) interest only for 85 months (7 years and 1 month).  At the end of the 7 years there would be a balloon payment.  There was no prepayment penalty. They paid 3.5% as a Loan Origination Fee, $895 Processing Fee and $295 for Document Preparation as well as escrow and title fees.

 

Their interest only monthly payment for the loan was $2,112.  Property taxes were $338 and insurance was $70.  Total payment was $2,520.  The appeal to these Buyers was that their kids did not have to change schools, their payment went down $1,094 and they got their attention off the impending foreclosure.  

 

Give me a call with your Hard Money scenarios and let me tell you how I can help.

 

 

Best, Forest

Owner/Broker – The Guy in the White Hat

www.sunpacmortgage.com

 

 

Forest Tardibuono is a CA DRE Broker with over 25 years experience in real estate and lending.  His number is (707) 523-2099.  See website @ www.sunpacmortgage.com.



[1] FNMA is the Federal National Mortgage Association also known as Fannie Mae.  FHLMC is the Federal Home Loan Mortgage Corporation or Freddie-Mac.

[2] APR is Annual Percentage Rate.  This Rate takes into account the closing costs needed for a loan and allows for easier comparison of loan programs.

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