By Broker, Forest Tardibuono
The current line-up to accommodate almost any Buyer for any residential property type is as follows:
1. A 30 year fixed rate lender (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 Hard Money Lender.
Keep in mind that most Hard Money lenders typically will also do more than 4 units, commercial, land loans and construction loans. Hard Money is pretty forgiving on credit. A person can have recent foreclosures, be in bankruptcy, done a recent short sale, low credit scores, have collections, liens, etc., or a combinations of these.
I recently saw a Wall Street Journal article Explaining the Methods of Hard-Money Lenders (written July 21, 2011). It begins with “As banks continue tightening their purse strings…” which is the theme of the article. The article mentioned the increased use of Hard Money due to the “…tight lending these days…” of institutional lenders.
It then goes on to explain the fact that these hard money loans are concerned with “asset valuations and loan to value-ratios.”….”There’s no red tape.”…. “Because there is little bureaucracy when compared with big banks, deals can be approved and closed in just a few days.”
The busy Realtor in today’s market (and well into the future) has to know about Hard Money. The fact is there are the 30 year fixed rate type lenders out there, call them “A” paper lenders, and then there is Hard Money which is now the catch-all for everything else as there are no “B”, “C”, “D” or “sub-prime” lenders in today’s market. So be well versed in Hard Money and make it easy Buyers to get into contract.
True, Hard Money loans average 12% interest but for many buyers Hard Money is the only option. And it is well worth it to get into that new home. Down the line one can refinance once qualified for one of the other loan programs covered above – but one won’t miss out right now! Don’t fret about rate objections, just acknowledge and get the contract signed.
Hard Money is here to stay and is a vital tool for the busy realtor. 2/3 of the loans I do are for purchases. The Buyers are so grateful too, as they thought they had no chance for home ownership.
Why not give me a call at 707-523-2099 and I will get you/your Buyer fully set up for a Hard Money loan and you can go ahead and get the house deal closed!
Forest Tardibuono is a CA DRE Broker with over 24 years experience in real estate and lending. His number is (707) 523-2099. See newly designed website @ www.sunpacmortgage.com. DRE license #01000559. NMLS #289456.