Sometimes when applying for any real estate loan, it can seem that you almost have to be a member of a country club with a good contact to get a loan. Either that or your father in law is the head of large bank. With conventional loans, it can be frustrating.
If you shifted your thinking and started looking for a hard money personal loan which is backed by real estate, you can create a whole new paradigm in the way these private money loans are looked at. Private money loan rates have been slowly coming down in the last few years. These loans are open season to people with low credit, bad tax returns, foreign nationals, unemployed people, etc.
When applying for a Los Angeles hard money loan, the lender will mainly look at two things.
1. How much of a down payment do they have?(in the case of a purchase)
2. For refinances, they will look at the amount of equity you have in your property.
Of course that is not the only thing we look for. We will take a look at more minor things but none of these will be more important than the 2 items above. We also look at:
*Credit-We take a look at credit but we have given hard money loans to people with 400 credit just as often as people with 700 credit. We do need a snapshot of the person but the basic premise of the loan approval is the equity in the property
*1003-This is the simple 5 page application. This shows how you intent to use the property, some of your existing real estate that you have and in many cases, people don’t have any.It shows your current income. All of these things are not verified but we ask that the borrower be truthful.
*The neighbors of your future real estate purchase. Often times an appraisal doesn’t address the neighbors who have cars parked on their lawn which are on jacks while the chickens are running around the yard. This is somewhat in jest but I have had a few like that and I still did the hard money loans.
*Flipping the property-there are numerous flippers who flip homes in Los Angeles, Orange and San Diego counties. As soon as the flipper starts to renovate the property, the loan becomes safer to the lender because of the improvements they made.
Some things the borrowers look for would be thing like:
–Hard Money loans Interest Rates
-Speed at which they can close
-Do they require an appraisal? Many lenders do not. (It adds to the expense of the deal and several days time)
-The amount of points the lender charges for the private money loan
-What is their track record on getting the deal done? Some lenders advertise a low rate to get the person to call and then at the last minute, the borrowers are told the investor backed put and they will have to raise the interest rate to entice a new investor to invest.
-What is the length of the loan?
What is the answer on whether you should use a hard money loan or not?
There isn’t one answer. They are not for everybody but some borrowers strictly use them and no other types of loans. Shop around and go with someone you feel comfortable with. They can be lucrative despite the higher interest rates. Hard money loans can allow you to leverage your money and buy more properties that you might not otherwise qualified for.
For California hard money loans, I would recommend www.cahardmoneynow.com They can fund in 7 days or less and have a pretty good track record. Get more information about Los Angeles private money loans, Call US 714-681-2407.