Category: Loan Products

SMALL BUSINESS ACT

The SBA is the Small Business Administration and offers business loans. The most common types refer to Sections 504 and 7(a) of the Small Business Act. If you’re looking for a small business loan to purchase commercial real estate or heavy machinery/equipment, then the 504 loan is the best choice. If you are purchasing a business or getting working capital, then the 7(a) loan is preferred. The 504 loans are typically structured with a participating lender covering up to 50% of the total project costs, SBA providing 40% of the total project costs, and the borrower contributing 10%. 504 loans...

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WHAT’S THE BOTTOM LINE?

  A mortgage payment could be less than your rent payment. You may think you cannot qualify, but you’d be surprised. There are many new products on the market.  There are no-money down loans, and low-down payment loans available where the down payment can be a gift. If you do not have good credit, we can help you restore your credit, for FREE. We have worked with many customers to help them improve their credit. Bottom line, now is the time to buy.   Contact us and we can help you! We offer a variety of products and services, ask us...

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BUYDOWN AS AN EXAMPLE

As interest rates fluctuate, you may see lenders offering mortgages with buydowns. This is a different type of mortgage than if you buy down the rate. I’ll explain: If you buy down the rate, you are paying extra money, usually points, to get a lower rate. The rate you buy down becomes the rate for the life of the loan. A buydown is a different product; let’s look at a 2/1 buydown as an example: If the 30-year fixed rate is 4.5%, the buydown start rate for that 30-year fixed mortgage is typically higher, say 4.75% in this example. A...

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SHOULD YOU LOCK THE RATE OR FLOAT?

When a customer applies for a loan with us and we quote an interest rate, we’ll ask the customer if they want to lock it in or float the rate. To lock in the rate means that will be the rate for their loan. To float means the quoted rate could change, it could go up or go down, depending on market conditions. It will have to be locked before closing, so they can float it up until then. The question becomes whether to lock in or float the rate. If it is an increasing rate environment, then you may...

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WHY WOULD ANYONE WANT ONE?

Hard Money loans are usually obtained by borrowers who cannot qualify or the property does not qualify for conventional financing; many people doing fix and flips obtain these loans. The interest rate and costs for these loans is higher than what you can get conventionally. The reason is that there is more risk to the lender. We often see higher down payment requirements on these loans, e.g. 25% to 30% down, this is to protect the lender in the event of default; the loans may have pre-payment penalties, too. Given all of the bad features of these loans, why would...

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RESIDENTIAL FINANCING

If you are purchasing multi-unit investment properties, the type of loan will depend on the properties. If you are buying 1-4 unit properties, conventional residential financing applies. If you are looking at 5+ units, then commercial financing applies. Often times, residential financing will give you better terms than commercial financing. For example, you can get a 30-year fixed mortgage with residential financing. A commercial loan may offer a fixed period, but it may vary after the fixed period and could contain a pre-payment penalty. The costs are usually higher on a commercial loan, too. We had a client who wanted...

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PLEDGING ASSETS

With the way the stock market is running, many people do not want to liquidate their accounts to make a large down payment on a home. They are conflicted because they want to make a large down payment to get a better interest rate, but do not want to sell the assets in their investment accounts and pay taxes on any gains. By pledging their assets to the lender, they will be able to keep money in the market and be given credit for a large down payment. Example, a couple is looking to purchase a $700,000 home, and want...

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NEW CONFORMING LOAN LIMIT: WHAT DOES IT MEAN FOR YOU?

The Federal Housing Finance Agency increased the 2018 conforming loan limit to $453,100 and is projected to rise to $484,350 during 2019. What does this mean for you? Conventional loans in the amount of $484,350 and less are typically underwritten in accordance with Fannie Mae or Freddie Mac guidelines. Loans in excess of this amount are considered jumbo loans and are underwritten in accordance with the specific investor’s requirements. Jumbo loan requirements can be more stringent than conforming loans. Conforming loans often have lower interest rates than jumbo loans. There are conforming loan programs for as little as 3% down...

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