by Broker, Forest Tardibuono
New Year – New Regulations Loan Structure in My Office
I want this article to be nothing but positive, because that is my attitude going in to this new year in the face of new regulations. A lot of new regulations. Tons of new regulations. More friggin’ regulations than you can shake a stick at. But I digress.
I just read that the new laws regarding loan originator compensation are 541 pages! Sorry, digressing again.
I only do Hard Money loans. They break out into 2 rough categories – Owner Occupied Principal Residence and Investor loans. Investor loans is the broader category because an investor is someone who is buying or refinancing something other than an owner occupied principal residence, be it land, commercial or mixed use property.
My strength is in loan amounts around $400,000 or less. I do larger loans on what I deem a case by case basis. I have gotten many, many loans over $400,000 done, but the real sweet spot with my investors is $400,000 and under.
Rates in my office for both owner occupied and investor loans vary according to the loan to value. The higher the loan to value the higher the rate. I will lend as high as 75% loan to value but more normally I lend to 70% loan to value. So the higher rates in my office will be at those LTVs or loan to values.
Credit can affect the rate a Buyer or Borrower gets. If it’s really bad and fresh stuff – like a recent short Sale, foreclosure or bankruptcy, it can affect the rate. Not always, but sometimes.
Income is now something the Feds have compelled us to look at for hard money, especially the owner occupied loans. Debt ratios need to be under about 50% or there needs to be enough disposable income after paying all monthly debts.
That’s pretty much the structure in my office. The complete line-up of available loan programs across the USA is a much shorter list than in years past. There are A paper loans for borrowers who have good credit scores and good verifiable income. And then there is Hard Money. There used to be a lot of in-between programs like subprime loans, B and C paper, etc. The in-betweens have virtually all gone away.
I can Pre-Approve someone in about 5 minutes and can write a Pre-Approved Letter right after doing the loan application. You can always call me and run your loan scenario by me. I pick up the phone and I am really great with emails.
Forest Tardibuono- the Guy in the White Hat – is a CA DRE Broker with 25 years of experience in real estate and lending throughout Northern California. His phone number is (707) 523-2099. See regularly updated website @ www.sunpacmortgage.com.