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What is a Hard Money Loan?

Hard Money loan qualifications are more forgiving than conventional or bank financing and the two basic qualifications are:

#1. Decent existing real estate equity or at least a 25% down payment if a purchase and
#2. An ability to repay the loan.

You could get up to 70-75% of the value of the property. If in Sonoma County, you could get up to 80%. Hard money loans are based largely on equity from real estate assets.

Basically considered all cash, such loans are extra strong and can be used to purchase or refinance fixer properties, bad credit borrowers, irregular income borrowers, large cash-out borrower, someone needing fast cash, short term Bridge loans, etc.

Owners still need to refinance their homes to make home improvements, buy a 2nd home or investment property and Buyers still want to buy even with tarnished profiles. Hard Money is the only option out there if they have been turned down by their favorite bank or mortgage broker or local Lender.

Many people have credit card rates that are 15% to 32% and Hard Money rates average 9% to12% with interest only payments. It will likely cost a bit more than a 30 year fixed rate loan and the rates are higher but it can get you the money you need you have been turned down elsewhere for a refinance or home loan.

We invite you to call us at 707-523-2099 and see how Hard Money will work for your situation. Having worked with many types of loan scenarios since 1988, we are quite experienced, we are honest, fast and our rates are pretty good!

What Credit Score Is Needed To Buy A Home?

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.

fico

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!

(707) 523-2099

 

Original Keeping Current Matters blog link:  http://www.keepingcurrentmatters.com/2016/10/17/dont-disqualify-yourself-over-half-of-all-loans-approved-have-a-fico-score-under-750/

Hate Turning a Borrower Down?

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We get loans brokered or referred to us by mortgage professionals who had to tell the borrower “no” for whatever reason. Most that call us need quick action and approval – because they are running out of time. You actually do want to help – and have had underwriting fail you.

Sun Pacific Mortgage is uniquely qualified in that our underwriting is based on 2 things – loan to value and ability to repay. Even our “ability to repay” is far more flexible than conventional underwriting.

We loan up to 75% of the value of the property and in some instances as high as 80%. We do Jumbo Loans commonly

Call us today at (707) 523-2099.

Local & Creative Financing For Real Estate

“I am truly in awe of you your company! Yet again another seemingly seamless (I know you are working hard to make it seamless) process thanks to the systems that you have in place! Always a pleasure!”

“I commend you on another transaction and I will continue to refer you guys as I have on several occasions this past year! Much appreciation to you and your team! All the best, S.M.”

Hard Money Provides …

  • A Quick Close
  • Multiple Options
  • Shorter term loan
  • Makes an impossible deal possible

See some recently funded loans below, to get a better idea of how we can help you, your clients, your family and friends!

Call Us today at (707) 523-2099.

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Best,
Ken and Forest, The Guys in the White Hats

P.S. We love Referrals!

Recently Funded:

Santa Rosa, CA (Sonoma County)

Loan Type: Refinance Owner Occupied 2nd
Amount: $150,000
Days to fund: 23 days
Reason for Hard Money: Debt consolidation

Sonoma, CA (Sonoma County)

Loan Type: Owner Occupied Business Purchase
Amount: $200,000
Days to fund: 9 days!
Reason for Hard Money: Credit was poor

Sebastopol, CA (Sonoma County)

Loan Type: Owner Occupied Purchase Bridge Loan
Amount: $562,000
Days to fund: 10 days!
Reason for Hard Money: Still had foreclosure reported on credit

Windsor, CA (Sonoma County)

Loan Type: Owner Occupied Hybrid – 15 year loan with 3 years interest only and then amortized for 12 years
Amount: $440,000
Days to fund: 15 days
Reason for Hard Money: Difficult to prove income

Mill Valley, CA (Marin County)

Loan Type: Investment Property Refinance
Amount: $240,000
Days to fund: 8 days!
Reason for Hard Money: Property needed fix-up

Elk Grove, CA (Sacramento County)

Loan Type: Owner Occupied Refinance
Amount: $260,000
Days to fund: 20 days
Reason for Hard Money: Low credit scores

Click this link for our rate sheet, showing the programs we offer.

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

California Housing Market Headed in Right Direction

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:

County April Median Sold Price March Median Sold Price MTM% Change
Tehama $193,330 $175,000 81.8%
Amador $307,890 $267,860 77.4%
Plumas $231,250 $266,670 75.0%
Tuolumne $239,710 $272,500 71.8%
Napa $666,670 $664,470 70.9%
Merced $189,500 $197,780 70.8%
Santa Barbara $596,770 $729,170 63.8%
Alameda $762,570 $712,990 61.5%
Ventura $620,020 $610,820 61.3%
Yolo $374,000 $387,930 59.6%

 

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.

housemarket

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!

Owner Occupied Principal Residence – Part 1 of 2

oo 1 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!

champagne-cork

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.

informed-borrower

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.

That’s why these loans are a great investment.

To continue reading on to Part 2, click here!

Our Changes For Your Benefit

Hope you had a relaxing Memorial Day weekend.

To benefit you and your clients, we have just updated our rate sheet to easily show the alternative finance programs we offer taking into account the numerous changes, due to recent regulations handed down by the Feds.

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Please let us know if you have any questions. And for sure let us know if you need our assistance for yourself, friend or any of your clients!

Best,
Ken & Forest – The Guys In The White Hats

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Private Lending Filling the Mortgage Gap

With Real Estate prices rebounding in California, it’s surprising to see banks still being cautious and lean only toward wealthier, lower-risk borrowers. This has left a widening gap in the mortgage industry between Lenders and potential Borrowers with less than perfect qualifications.  Mortgages in the U.S. last year totaled about 1.6 trillion, according to the Mortgage Bankers Association. On a scale like that, Private Lending trails closely behind, with demand growing every year.

Middleman (1)These days, Borrowers typically only need one or more flaws in their qualifications to be denied traditional lending. This can be a huge disappointment to Borrowers who otherwise have fantastic qualifications and are in great need of help.

A perfect example can be found in a recent Wall Street Journal article posted here: http://www.wsj.com/articles/private-lenders-remodel-the-mortgage-market-1462984898

“Ms. Lewis is an executive director of Los Angeles County’s Mental Health Commission. She has over 22 years of equity in her home with an estimate worth of $600,000. A recent divorce and subsequent bankruptcy has ruined her credit and caused loan rejections from every bank she approached.”

As an experienced, longtime Private Money Broker operating in Sonoma County California, Sun Pacific Mortgage & Real Estate could approve her loan based strictly on her job status, steady income, and available equity. Her recent bankruptcy would not affect her qualification in this scenario.

Have you been turned down for a loan due to less than perfect qualifications? Call Sun Pacific Mortgage & Real Estate today! (707) 523-2099

Recently Funded – Providing More Options

Hard Money Provides …

  • A Quick Close

  • Multiple Options

  • Shorter term loan

  • Makes an impossible deal possible

“The entire family and staff at Sun Pacific Mortgage are the best hands down.  They are honest, direct, professional, quick, efficient and realistic.  It was like when everyone else seemed to be against us, Sun Pacific found a way to make things happen.  We cannot thank them enough! “ LW

See below for some of our recently funded loans, to get a better idea of our various real estate finance programs.

Let us help you, your clients, your family and friends! Call Us today at (707) 523-2099.

Best,

Ken and Forest, The Guys in the White Hats
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P.S. We love referrals!

Recently Funded:

Get our financing despite credit score, self employed-difficult to prove income, need fast financing, property a fixer, etc!

We finance Jumbo loans, Bridge and short term loans, Primary Residence or Owner Occupied purchases and refinances, non-owner purchases for single and multiple units, some commercial and land.

 

Windsor, CA (Sonoma County)
Loan Type: Owner Occupied 2nd
Amount:$440,000
Days to fund: 15 days
Reason for Hard Money: Credit was poor

Modesto, CA (Stanislaus County)
Loan Type: Investment Property Cash-out Refinance
Amount:$220,000
Days to fund: 29 days
Reason for Hard Money: Property needed fixing

Sebastopol, CA (Sonoma County)
Loan Type: Owner Occupied Purchase Bridge Loan
Amount:$562,000
Days to fund: 10 days
Reason for Hard Money: Needed fast cash to buy new home while selling old house.

Lakewood, CA (Los Angeles County)
Loan Type: Owner Occupied Purchase Temporary Loan
Amount:$420,000
Days to fund: 16 days
Reason for Hard Money: Property a fixer

Mill Valley, CA (Marin County)
Loan Type: Non-Owner Refinance
Amount:$240,000
Days to fund: 8 days
Reason for Hard Money: Recent Bankruptcy

San Diego, CA (San Diego County)
Loan Type: Owner Occupied Business Purpose
Amount:$200,000
Days to fund: 18 days
Reason for Hard Money: Self Employed, difficult to prove income

Sonoma, CA (Sonoma County)
Loan Type: Owner Occupied Business Purpose
Amount:$200,000
Days to fund: 9 days
Reason for Hard Money: Divorce circumstances adversely affected credit score

What Is An Owner Occupied Hard Money Loan?


Most Hard Money Lenders these days do not offer Owner Occupied financing programs, also known as a Principal Residence Loans, due to the amount of federal and state regulations that apply to them.

Here at Sun Pacific Mortgage, we will always have this loan program available because of the important niche it fills for so many Borrowers.  We continuously work to stay on top of the regulations that apply so that people have somewhere to go when they have have tarnished credit, difficult to prove income or are dealing with a problem property.

This type of program does have a higher interest rate but it allows a quick close, makes an impossible deal possible, offers various options and is generally a shorter term loan.

Typically, this type of loan will get paid off with a refinance into a 30 year fixed rate loan once the Home Owner is more able to qualify.

Some instances of when one might use an Owner Occupied/Principal Residence Loan are:

  • Buying a first or a 2nd
  • Refinancing a loan that has come due.
  • Pulling some cash out from the equity in one’s home, to do needed repairs or remodeling.
  • Getting some cash out for debt consolidation.
  • Getting some cash out for a business purpose.

You can find out about our rates and fees by checking out the Rate Sheet: https://www.sunpacificmortgage.com/SPM_Programs_Rate_Sheet.pdf

Also feel free to call in to our office and within just a few minutes, we can let you know exactly what we can do for you: 707-523-2099.

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