Many potential home buyers believe that they need a score over 780 to qualify. In today’s world, this is no longer true.
One of the more common misconceptions keeping potential home buyers from beginning their search has been the fear that their credit score is too low.
According to a recent study by The Wharton School of Business, the good news is that over 50% of all approved loans had a FICO Score under 750.
Taken from a recent KCM blog post (full article link below), this depicts nicely what the real scoop is:
Below is a breakdown of the FICO Score Distribution of all closed (approved) loans in August from Ellie Mae’s latest Origination Report.
The chart above illustrates the point that low credit scores are not a reason to avoid seeking a mortgage. More than half of all loans in August were awarded to individuals with credit scores as low as 600.
At Sun Pacific Mortgage we welcome not only low credit scores, but bankruptcies, imperfect properties, difficult-to-prove income and a host of other issues that the conventional lender won’t consider. We finance jumbo loans, bridge and short term loans, owner occupied purchases and refinances, investment purchases, commercial and land.
Call today with any questions or scenarios and we’d be happy to help!
NOTE: Get our financing despite bad credit, difficult to prove income, property a fixer, etc! We finance Jumbo loans, Bridge and short term loans, Owner Occupied purchases and refinances, investment purchases , commercial and land.
CALL TODAY, The Guys In The White Hats at (707) 523-2099
In April, California Association of Realtors released their 1st quarter California Housing Market Update citing a number of interesting updates.
C.A.R. President Pat “Ziggy” Zicarelli was quoted as saying:
“California’s housing market is moving in the right direction as we enter the spring home-buying season, but sales growth will likely be isolated in areas where inventory is more abundant and housing affordability is less of an issue.”
Taking a look at the the data C.A.R released, it’s interesting to note certain counties with sharp upticks in sales:
April Median Sold Price
March Median Sold Price
Of the top 10 counties in California with MTM% changes, we can see a nice spread of housing sold in potential up and coming areas. With Tehama, Amador, Plumas, and Tuolumne Counties all located in Northern California, it would seem affordable housing under $300k is becoming more abundant and selling well. We can also see affluent areas like Napa, Santa Barbara, Ventura, and Alameda all maintaining solid home sales in areas with much larger home prices and a steadier inventory.
As a Hard Money Broker in Northern California for over 28 years, Sun Pacific Mortgage & Real Estate will always be there if you are looking for creative or alternative financing for real estate, anywhere in California.
We specialize in financing investment home purchases and refinances – single and multiple units. We are very much able to fund or refinance Bridge Loans, many owner occupied or principal residence purchases and some commercial purchases.
Give us a call at (707) 523-2099 if you are considering private financing with your next home purchase!
This will be the first in a series of articles that will explore the varied types of loans we offer Investors.
Let me start off by saying that I will always do loans to homeowners that are owner occupants. It is an important segment of lending and a heck of a niche for my office. It also has the most regulation by the state and feds who, in their infinite wisdom, have decided that this category of homeowner needs protection. Lots and lots of protection.
I will also tell you that there has not been a foreclosure of an owner occupied loan (that I am aware of) for the last 6 years. This is key.
These are generally very good loans. Most are just shy of getting 30 year fixed rate loans at or under 4% from what we call “A” paper lenders like Wells Fargo, Chase or B of A. Most are turned down due to something in their credit. Second most are turned down due to income. Problem property is the third reason. All the turned down loans that we write have down payments of between 20% and 60%.
Many mortgage brokers have backed off of this type of loan. My guess is they have been run off by the profusion and confusion of regulations. The tragedy is, they have run a lot of investors off of this type of loan. And really, it’s not that tough to know the regulations and comply. Yeah, there has been a lot of regulation, but my viewpoint is that you get your wits around all of it and simply comply with the fed and state mandates and you do these loans. So that’s what I do and that’s why I promote this type of loan.
Almost all of the owner occupied loans that we write have an “exit strategy”. We never used that term before the proliferation of fed and state regulations in response to the recession, but here it is. We write these loans as 15 years loans but I would wager none will go to that term. I looked at the statistics of the owner occupied loans we have written that are serviced and the ones that had paid off lasted an average of 11 months. So we make 15 year loans but they most likely will not last that long. And if they do, hallelujah!
One thing I must mention that I think increases the security of those loans, is the fact that the feds require they be impounded for the payment of property taxes and insurance. The feds did get that one right. You know every month that those items are paid and not accumulating.
The feds also require that the Borrower on an owner occupied loan demonstrates an “ability to repay” the loan. We don’t even write the loans if they cannot prove they can repay the loan. We turn down quite a few requests, even with a ton of equity, because they cannot prove their income.
Last item to mention is that the feds mandate these Borrowers do a consumer credit counseling class before the loan records. The counselor takes the disclosures for the loan and does a budget talk with the borrower. It’s done over the phone and takes about 45 minutes to an hour. This theoretically makes for a more informed Borrower. Makes sense to me.
So, statistically, owner occupied loans don’t get foreclosed upon, the loan to values are good, they have an ability to repay the loan, they have an exit strategy, they pay the property taxes and insurance monthly, they do a consumer credit counseling class and the properties will likely appreciate in the coming months and years.
I admit that I had very little understanding about this type of alternative financing when my parents asked me to move back to Sonoma County and work in the family business, after living on the East Coast for so many years. I’m sure glad my wife and I decided to live in Santa Rosa and participate in this unique real estate finance option as it has and can help so many home buyers!
I bought my own home in Santa Rosa using Hard Money as I was self employed and my wife had less than 2 years of tax returns from her W2 job. We couldn’t get a home loan from anyone we called, just kept getting turned down and this was despite us having a 25% down payment. We really did not want to miss out on this house, good area, nice neighborhood and close to a good school. So, we decided to get a Hard Money loan and boy are we glad we did! We found out from the Listing Agent that the Buyers accepted our offer as it was stronger than others, since we could close fast with the Hard Money financing, as it was virtually considered cash and it came from a company that was well known, having been in business for almost 25 years.
Since this time, as the Lead Loan Originator for Sun Pacific Mortgage and Real Estate, I have worked hard to help others understand the benefits of Hard Money financing (also known as Private Money). Sure it has higher interest rates but this is all relative to what one is currently paying in rent or will be paying for rent. Our family’s monthly payments increased by only $200 from our apartment we were renting but it was completely worth it as we got an entire house with a nice yard – and were able to refinance about 9 months later!
So the question really should just be, “Is Hard Money right for me?”. We know hard money is legitimate when gotten from a licensed Hard Money Broker and that it can be very beneficial in the right circumstances…just as it is with other types of conventional financing.
If you have any other questions or are interested in getting a Hard Money loan in Santa Rosa, Sonoma County, North Bay or really anywhere in California, please do call me at our office 707-523-2099 and I will let you know how we can help.
Best, Ken – Another Guy in the White Hat
Lead Loan Originator at family owned and operated Hard Money Broker, Sun Pacific Mortgage and Real Estate, serving all of California since 1988!
CA Bur RE license #01858042. NMLS #1221130.
Having a local, truly experienced and educated Hard Money Broker behind you for your purchase or refinance is more important than you may think.
A recent Hard Money article in Trust Deed Capital BLOG covers the importance of this quite nicely. Titled “Qualities of Top Hard Money Lenders”, posted by Ken Meyer.
I can say with complete certainty that after 28 years of Northern California real estate and mortgage experience under my belt, I can let a home buyer, investor or another real estate agent know within just a few minutes if they are qualified for a hard money loan or not.
Having extended my reach throughout California over the past 6 or so years, my family owned and operated alternative finance Brokerage is become more and more expert with the real estate in the Southern and Central California as well.
I have included the original link to the above mentioned article as well as the article itself below, it is important to share with anyone who is considering an alternative source of real estate financing due to poor credit, being turned down elsewhere, being self employed with difficult to prove income or you just need fast financing.
Best, Forest – The Guy in the White Hat
Co-owner and Hard Money Broker of Sun Pacific Mortgage & Real Estate
Posted by Ken Meyer on Tue, Dec 08, 2015
While it may seem, to the inexperienced, that hard money lenders operate in a “no man’s land,” the reality is, the top Hard Money Lenders have certain key characteristics in common. If you do decide to retain the services of a hard money lender, here are some of their best practices that you should be on the lookout for:
If you are looking for a hard lender because you have been rejected by a bank, then you might be tempted to run to the first hard lender you can find to get your loan quickly. But do your due diligence first. Some hard lenders are genuinely interested in helping you finance your real estate project, but others are little more than loan sharks. Ask yourself some of the following questions as you areassessing potential lenders:
1. Does the lender have someone that you can meet with and contact? Some hard money lenders operate in all 50 states, but you might consider finding one who operates in your state. The most reputable hard money lenders will want to see the property you are planning to purchase firsthand.
2. Does this lender have a legitimate web site? Many hard money lenders have web sites that are designed to gather your information before passing it along to a third party. Avoid these kinds of sites.
3. Is the lender in good standing with its investors? Does the lender have any pending lawsuits from its investors over bad loans or foreclosed properties? If it does, this can be a red flag as to the financial health of the lender.
Seasoned Investing Knowledge
Most hard money lenders are not the mindless paper-shufflers that you find at a traditional lending institution that need to get acceptance for every decision that they make. Instead, they are seasoned investors who have been to this particular rodeo more than once and can quickly and efficiently vet a deal that is worthy.
Most hard money lenders have been in the real estate game for most of their adult life. They understand that manyproperty deals do not fall into the neat categories set by the traditional lending institutions in the industry. Their vast experience, however, allows them to evaluate a deal on its merits, rather than on some arbitrary criteria set up by a lending committee.
The hard money lending industry is a reputable one that recognizes the value of secure business transactions. For this reason, hard money deals are structured along the lines of traditional mortgages. That is, appraisals and inspections are done, escrow accounts are established, and standard written contracts are utilized. The whole point of the process being to protect the interest of both the borrower and the lender.
Hard money loans aren’t for everyone, but, those with less than stellar credit, needing a quick loan, wanting to fix up a property, all fall within the parameters of why hard money is beneficial.
If a Borrower qualifies for conventional or traditional financing, I tell them. Not only is it legal but it is the right thing to do.
However, what about those who want to buy a dump property and fix it up? What about the home buyer who was just turned down by their bank for a home loan yet they are already in Escrow and need a loan quickly so they don’t lose out on that house? What about someone with a bankruptcy within the past couple of years?
A Hard Money loan is the answer.
There was a good blog posted by Trust Deed Capital in August called “Quick Hard Money Loan Structure Explained”, that explains in pretty good detail what hard money is and how it is beneficial (link to article below).
After 28 years in Sonoma County, our family company has helped thousands of home buyers and home owners, investors and other real estate agents and lenders to get a hard money loan and accomplish the deal they were working on!
Anyone who lives in or wants to live in California – Northern CA and Southern CA ( yes, this includes Sonoma County, Monterey, Santa Barbara, Napa, San Mateo, Marin, etc.) who is having problems getting a loan, give us a call and see how we can help.
Best, Forest – The Guy in the White Hat
Hard Money Broker and Owner at family owned & operated Sun Pacific Mortgage and Real Estate, Serving all of California Since 1988!
CA Bur RE ID #01000559. NMLS ID #289456
Quick Hard Money Loan Structure Explained:
Don’t Give Up. You COULD Qualify To Buy A Home NOW.
Home buying CAN become a reality. There are many loan programs available and families might just qualify to buy now – but they have to look for experienced lenders and agents to help get them all the information out there. DON’T GIVE UP.
Persistence. Experience. Sincerity. Caring. These are traits any Realtor and Lender or Broker should have when you decide to work with them. You need to know all your options for BUYING NOW.
The KCM Crew just wrote another great blog called “The Cost of Waiting To Buy a Home”. It lays it out pretty clearly how waiting to save up for more of a down payment or waiting until your credit is the highest you can get it, just costs you more money down the road when you actually buy your home.
Stop waiting, wondering and hoping. It’s time to take action and find your local licensed, experienced, honest and persistent Agent who can provide you with what you need to get into a home – sooner than later.
If you want any information about alternative financing due to poor credit, difficult to prove income, property a fixer, etc. then don’t hesitate to call my office at 707-523-2099 and we can provide this. We are located in Santa Rosa and have been offering hard money loans (also known as private money) for over 28 years. We offer $100,000 on up to jumbo size loans in the North bay areas, South bay areas and actually throughout all of California.
Best, Forest – The Guy in the White Hat
Hard Money Broker of family owned and operated Sun Pacific Mortgage & Real Estate company, serving all of California since 1988! www.sunpacmortgage.com
CA BRE License #01000559. NMLS #289456
Being the last hope for an individual or family to buy a home or an investment property is not just a job for us but something we are proud we can be.
We hope the following recently funded deals shows you how we can help you, your client, a family member or friend, anywhere in Sonoma County and all throughout California for that matter.
“The Sun Pacific Team is extremely knowledgeable with decades of experience. They also really care about their clients, are efficient and provide the lowest stress possible. I would hire Sun Pacific again, without hesitation, for my next home buying experience.” Regards, Karen
Call Us Today at 707-523-2099 with your real estate finance scenarios and see how we can help.
Best, Forest & Ken, The Guys in the White Hats
P.S. We love referrals!
RECENTLY FUNDED TRANSACTIONS:
NOTE: Get our financing despite credit circumstances, self employed difficult-to- prove income, need of fast financing, property a fixer, etc! We finance investment properties, owner occupied properties, multi-units, some commercial and land throughout California.
SANTA ROSA, CA Type: Rental Properties Refinancing Amount: 531K Days to fund: 8 days Reason needed: Bankruptcy in the past years
Type: Investment Property Purchase
Days to fund: 22 days
Reason needed: Short Sale still on record
Type: Owner Occupied Bridge
Days to fund: 14 days
Reason needed: Property condition poor
ROHNERT PARK, CA
Type: Principal Residence Purchase
Days to fund: 8 days
Reason needed: Difficult to prove income
Type: Owner Occupied Short Term
Days to fund: 8 days
Reason needed: Credit Poor
Type: Commercial Property Purchase
Days to fund: 24 days
Reason needed: Owned multiple properties
Type: Owner Occupied Purchase
Days to fund: 22 days
Reason needed: Self Employed
Flipping properties in North Bay….when done smartly it’s good for everyone.
Having done many loans in the past and currently for flippers, I am with Rick Laws and Patrick Barber on what they say (see below Pacific Union Bay Area Real Estate Blog of June 6 2013 “San Francisco, Santa Rosa Metro Areas Ranked Among Top 25 Spots for Home Flipping”). The price ranges for flippers has increased and the luster being added back into neighborhoods is really good, I say.
My wife, Lynn, as the “Flipper Chick” Realtor she is really familiar with the flip market right now. She definitely is working extra hard to find the best properties for her client so he can fix them up well enough to pull in some profit. Santa Rosa’s values are moving up so fast that it’s a constant gamble.
I always enjoy hearing what neighbors say about the run-down houses that get fixed up. They only increase the value of their own house! Below was a recent neighbor who emailed Lynn about her client’s/flipper’s good work:
“What a beautiful flip on Monte Verde. I live a few doors down and it has been fun to see this property transformed in a short period of time. What a GREAT job. Please tell the owner the neighborhood appreciates the change. Enjoy this beautiful day.” Dorothy
If you have hard workers who take an honest passion in their job of fixing up a house, it will be good quality and they deserve any profit they make! Which is their living’s work.
Forest Tardibuono is Co-Owner and CA DRE Broker known as “The Guy in the White Hat” of Sun Pacific Mortgage & Real Estate – Your Northern CA Hard Money Lender since 1988. www.sunpacmortgage.com. DRE license #01464899/NMLS #360993