Is it a Good Idea using Retirement funds to buy a home? : 3CALOAN

If you maintaining your retirement account since you are an adult, then maybe you don’t have enough amount to put down on a home. However, you can use your retirement funds to buy the home which you want to buy but it’s your choice to use it or not. There are many taxes and penalties which you have to consider while purchasing a home. You can make the right decision by considering the following things.

Benefits of Using Retirement funds to buy a home

• Pay yourself interest –If you opt any loan then you do have to pay an interest rate. But if you use your retirement funds then the interest rate which you pay is the money back to your own account. From this, you don’t have to give any interest rate to the bank and you are not giving any profit to them.
• Avoid PMI – By putting 20% down payment of the home price with your retirement funds then you don’t have to pay PMI. By taking PMI it makes harder to afford because it usually adds quite a bit to a housing payment. PMI is the money which you’ll never get back. You can avoid it by putting 20% down payment of the home price. From this, you can save thousands of your dollars.

Disadvantages of Using Retirement funds to buy a home

• Job Risk– Almost all of the loans are due within 5 years. If you left your job for some reason then, the loan may become due and payable immediately.
• Potential of your investment- By using retirement funds to buy a home you will lose the earning power of your money. The money in your account is not just the money which you kept in your account but it is a compound interest that you earn by keeping the money in your account. Even if you will borrow for a short time period it can also diminish your savings.

Alternatives to Using Retirement funds to buy a home

• Reduce contributions to a retirement account – You can eliminate or reduce your contributions before you’ll buy a home. You will have a better situation if you will save for a down payment and contribute.
• Obtain money from a relative – You can use gift funds in some loans programs like FHA and conventional loans. You can ask your loan officer if there is any program that suits your situation perfectly.
• Lower down payment – There are many programs which require a minimum of 3.5% down payment of the home price. So you opt for any program if you can’t arrange a large down payment. There are also a few programs which also require no money down like USDA and VA loans.

Final Thoughts

It is your personal decision that whether you can you use Retirement funds to buy a home or not and you should explore all of your options. You should talk with your tax and loan officer in every situation even if you want to use your funds. If you do everything right, you can gain the benefits of using your retirement funds and saving money on your loan in the long run. 3CALoan can help you find your answers fitting your personal and housing needs. We help our customers every step of the way. We prioritize informing and educating our clients about the home buying process. Our client’s happiness and confidence upon closing a deal reflect our excellent quality services. To find out more information about manufactured home loans and how w can help, contact us at (818) 322-5626.

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HARD REAL ESTATE LOANS: 3CALOAN

Hard real estate loans- Hard real estate loans are short-term loans secured by real estate and issued by private investors or companies. They are usually a 12 months term loans, but they can extend from 2 to 5 years as well. This type of loan is a specific type of asset-based loan financing.

SITUATIONS WHEN A HARD MONEY LOAN CAN HELP

Real property secures the funds the borrower receives. There are many purposes of Hard real estate loans in California. The property can be used as collateral against private money loans in which you are planning to invest. You need a qualified investor that can help you better for such loans. Hard money loans can be used in many situations which we will discuss below:

WHEN YOU NEED HARD MONEY SECOND MORTGAGE

When you have financed a property through borrowing. However, you need some amount of capital to make the necessary renovations to improve the value of a property then opt for hard money second mortgage. There are many traditional loans which can cover the cost of your property and little less, so it may be not for sudden improvements. Because of your existing loan, you may not get the cash for your property renovation, but a hard money second mortgage can help you in financing the amount of capital to make the necessary renovations to improve the value of your property.

WHEN YOU’RE DOING A REBUILDING PROJECT

In the situation when the old properties have purchased by the investors and they refurbish the property and after that, they try to sell that property at a profitable rate. Generally, in California, the private money lenders are the founders of such deal. Investors can make a profitable investment for you by working little on such properties. If the property is in the poor condition, then it will be easy for an investor to avail it at lower rates or profitable rates. To invest in this type of deal, you will need an investor who will better understand your needs.

WHEN YOU ARE CONSTRUCTING A NEW BUILDING

When you planned to build a new building on your vacant plot then hard money loans can be a better option for you. In this project, hard money loans offer to fund without extensive underwriting that goes into traditional lending. The creditworthiness of a project, financial reserves, including equity, development history and timeline are determined by some factors which are generally considered by traditional lenders. You can pay back the loan by selling the property after the construction will be completed.

WHEN YOU’RE COMPETING WITH OTHER INVESTORS

When you have found a good property to invest and you think it will be a profitable property for you. However, others investors also have the same thinking and they are now competing with you for sale. Traditional loans can’t be processed quickly. They require a long period of time for an approval process before the lender will close and pay out. So, you can opt hard real estate loan because they move quickly and they require as little as 48 hours for an approval process before the lender will close and pay out.

FINAL THOUGHTS

When it comes to real estate transactions, flexibility and creativity are often at the heart of a successful investment. In order to succeed in every venture, you need to know when to seek a traditional loan. A hard money loan can be a significant asset when you need to move quickly or are otherwise unable to obtain a conventional loan, giving you the freedom to build your portfolio and enhance your property holdings without hassles, hoop-jumping, and heartache. You will get this loan very easily If you have all positive attributes. If you have questions about this program, you can contact us at 818-322-5626. You can get hard money loans today. Take the time to contact us right now!

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Private money loans for Real estate are Replacing Big Banks: 3CALoan

Why Private Money Loans Are a Good Choice

For last few years Private money loans for real estate have given more easily available access to funds for investments than many of the largest U.S. banks. Non-traditional funding options include crowdfunding, Private money or hard money lenders, and individual investors. With Private Money, the collateral for the loan is seen, many times, as at least equally as important as the borrower’s qualifications. It also provides more flexible underwriting guidelines as compared with Bank loans.

The loans are basically based on upon current or future Loan to Value (LTVs) for a potential cosmetic “Fixer Upper”. It is also to deal with major renovation or construction repairs. In many cases, you don’t need to provide your full documents such as your income details or asset requirements or your past tax returns.

Private Money Loans Excellent for Fix & Flip

Private money loans for the Real estate is a better option than government-backed or insured financial institutions because they offer loan much faster and it is best for “Fix and Flip” or “Fix and Hold” residential deals. There is a large difference in funding the loans between government-backed and private money. It will take one or two weeks for private money sources and a few months for government-backed.

Private money sometimes may fund the loan in just a week. It just requires work to be completed online i.e., real estate contracts, third-party reports, escrow, loan, title, etc. Generally, sellers don’t want to wait for a few months to sell their home and close escrow. It is usually due to a large number of potential buyers for the property. The faster an investor can have access to funds, get qualified, and close escrow on a potential deal, the better. Furthermore, it will enable them to get their purchase easily at the lowest offer prices possible.

Private Money Solutions vs. Big Banks’ Derivatives

Private money loans for Real estate have an option known as “Crowdfunding”. In Crowdfunding an investor asks to contribute to either a small or large number of people and they usually originate from the online community. Crowdfunding is one of the best options for people to invest in Real Estate, either directly or indirectly. Crowdfunding has also been used by many Charities to help pay the Healthcare costs for family members in need or to raise awareness for more individuals or group of people. Even computer designers use crowdsourcing to share free software code.

Who Reaps The Profits: Banks or Investors?

Instead of the Big Banks obtain all of the financial rewards related to their own Real Estate investments while still providing their bank customers interest rate between 0% to 1%. Crowdfunding and other private equity or debt options allow investors to share in the profits too. Crowdfunding has a variety of investment options and financial solutions for Debt or Equity investors. It has low risks and much higher returns than with investing their funds with their local bank branches.

Final Thoughts

In order for quicker lending or investment options, more buyers and sellers are matching up online through the internet, Social Media, real estate networking and investing groups. They also have a better access to real-time Big Data. 3CALoan can help you find a mortgage loan fitting your personal and housing needs. Our talented team can help ease the process of funding a loan. We help our customers every step of the way. We prioritize informing and educating our clients about the home buying process. Our client’s happiness and confidence upon closing a deal reflect our excellent quality services. To find out more information about Private money loans and how we can help, contact us at (818) 322-5626.

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PRIVATE MONEY LENDING GUIDE: 3CALoan

Who are private money lenders?

Private money lenders are a non-institutional individual or a company that gives a loan to borrowers. The loan comes secured on the basis of a note and deed to trust for a real estate transaction. Private money lenders typically have some type of relationship with the borrower as opposed to hard money loans.

THINGS TO CONSIDER WHEN CHOOSING A PRIVATE MONEY LENDER

Private hard money loans are basically for a short-term basis. Private cash lenders who avail money on these loans and these loans don’t require major formalities that are required by institutions such as banks when lending money. This is the best option if you want money for short-term basis without much documentation. Private money lending is famous for those who may fail to get the loan from the banking institutions. There are some factors that you should keep in your mind when considering who to choose as a private money lender.

CREDIBILITY AND EXPERIENCE

This is one of the important factors you should consider while choosing a private money lender. You want the lender who will not dupe you in the whole process of the loan and who is credible. To establish whether a lender is credible or not? You should find out the experiences of previous clients who have chosen that lender. To check the experience of the lender you can check the duration the individual has been availing loans and the respect they have in that profession. You want the lender who has been availing loans for a long time.

INTEREST RATES

When borrower search for a loan then sides by side they also need a lender who will offer them a favorable interest rate. As borrower will definitely don’t want to make a loss by giving a high-interest rate. So, the borrower should compare and contrast lenders when making the decision on who to choose to provide you with the loan.

STRENGTH

Before you choose any lender, you should confirm whether the lender has the financial capability to bear the loan amount or not? You can check this from their financial strength in the market.

APPLICATION AND APPROVAL

This is another important factor you should consider when the approval of the loan is made in terms of the time limit and also the application process. This loan doesn’t have a long application process. So, you will search a private cash lender who will ensure prompt and fast application process and approval.

PROPER DOCUMENTATION

This loan doesn’t have much documentation but it still needs to have some documentation which shows the loan is approved and basic terms and conditions. The documents need to be checked carefully to avoid instances of the fraudulent money lender.

FLEXIBILITY IN PAYMENTS

While choosing a private hard money lender you should consider that the lender who will avail you a loan will offer you a suitable payment plan. This will be determined by the payment plan given by the lender that you consider most suitable for your needs.

Final Thoughts

These are some of the factors that you should keep in mind while looking for a private money lender. Its all about choosing what is most convenient for your situation and what suits your needs. Possibly, from the distinctions above, you will find the best way to get what you want out of your loan. If you still have any doubt, feel free to contact us at (818) 322-5626 or (818) 3CA-Loan today! We will run you through the details of loans and hold your hand throughout the process.

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How to Avoid PMI With a high loan to value: 3CALoan

In conventional loans, if you borrow more than 80% then you have to pay PMI which cost you hundreds of dollars every month. You have to pay it until you reach 80% of the home value and if you borrow 95% of the value of your home then it could be a long time. Even with home appreciation, you will still have to pay in thousands of dollar in total. We have two Mortgages to avoid PMI with a high loan to value.

What Does PMI Do?

Before you decide how you want to handle your loan and hitting less than an 80% LTV, you should know what PMI does for you. PMI is not beneficial for you at all and you will pay for the insurance but it will give an advantage to the lender. If you have a high Loan to value then there will be a higher risk for the lender and they protect themselves from this risk with the insurance policy. The insurance would then cover a large portion of the amount you did not pay.

Two Mortgages to avoid PMI With high loan to value

Take a Subprime Loan With an LTV Over 80%.

Loans like FHA and USDA loans, they charge mortgage insurance but you pay that on any loan regardless of the LTV. Conventional loans are the only loans that charge PMI. Subprime loans offer loans with LTVs as high as 95% in some cases.

If you want to have loan check with various lenders in your area as well as online. You will come to know that there is a large variety of options available. Every lender has a different requirement credit score, down payment, and debt ratio. Find a loan for you with an affordable interest rate and closing costs.

Take a Piggy Back Loan With High Loan to value

If you have a good credit, you can easily qualify for a piggyback loan. You can two loans instead of using borrowing the full amount of the home. For example, you need $360,000 for a $400,000 home. You can able to get what lenders call an 80/10/10.

You can borrow $320,000 that is 80% of the total home value of $400,000. Then you will leave with $80,000 between the amount you borrowed and the purchase price. Then you can opt for a second mortgage of 10% piggyback loan i.e $40,000. It counts as part of the down payment on the loan. You will pay $40,000 itself as a down payment. You only need to borrow 80% of the home value on the first mortgage and then you will be left with 20%.10% of it you can pay as a down payment and a 10% down payment from the 2nd mortgage.

In these two mortgages, you can get a decent interest rate on the second mortgage which is comprised of just principal and interest. The first mortgage would include your principal, interest, taxes, and insurance. The one thing you would not have to pay is PMI.

Ask for a Seller Credit

If you find subprime loan too expensive and don’t want a piggyback loan then you will be left with one last option. Ask the seller for a seller credit and if he agrees you can use the amount to pay the PMI in one lump sum. You don’t have to pay any more money If you will choose this option because you will pay the full amount. Even though the seller pays the amount for you, you’ll pay it in a higher sales price as the seller needs to make up for the money he loses.

Final thoughts

It depends on your situation that If you can afford the second mortgage, take the piggyback loan. PMI is the easiest way to avoid the insurance payments. You’ll likely have to put down 10% of your own money. If you can’t afford the 80/10/10, consider a subprime loan. If the home where you are living is not your forever home, the lump sum payment does not make sense. You’ll overpay for insurance that you don’t need. We help our customers every step of the way. To find out more information about loans and how we can help, contact us at (818) 322-5626 or (818) 3CA-Loan today! We will run you through the details of loans and hold your hand throughout the process.

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GUIDE TO USING PRIVATE HARD MONEY LOANS WITH BAD FICO SCORE: 3CALoan

To invest in a property or to buy a new property you need to find a lender who can help you the money needed for that and the lender will do that as fast as possible. But if you are struggling with the fico score then finding a private hard money loan lender who will grant a loan can be a challenge.

Is your credit score is low for getting a mortgage loan? If yes then you’re not alone, according to a survey conducted in 2015 millions of Americans are facing this problem. There are many lenders in California who will help you to get a loan even if you have bad fico score. Read below to find out how you can get a loan even if you have poor fico score!

YOUR GUIDE TO GETTING A LOAN WITH BAD FICO SCORE

The one-third of Americans have bad fico score it is estimated by one of the top credit reporting agencies “EXPERIAN”. Their bad fico score means less than 600 credit score. There are millions of people in the U.S. with such a large portion of the population unable to acquire funding, it makes it harder for many Americans to make investments that require lenders approval.

HOW HARD MONEY LENDERS IN CALIFORNIA CAN HELP YOU

WHEN TO SEEK A PRIVATE HARD MONEY LOANS

There are several times when private hard money loan lenders might be able to get you funding, even when others can’t.

These include:

• While Purchasing a Home
• When You Own Multiple Properties and Need a Loan
• If You Need Cash Fast
• When You Need Funding for Flipping Real Estate
• When You Have Poor Credit
• If the property won’t qualify for a bank loan

Hard money loan can help you in any situation when you need to secure funding.

WHAT IS A HARD MONEY LOAN?

Private investors or companies issue hard money loans. This type of loan is a specific type of asset-based loan financing. Real property secures the funds the borrower receives. Private Hard money lenders are a non-institutional individual or a company that gives a loan to borrowers. The loan comes secured on the basis of a note and deed to trust for a real estate transaction.

HOW A HARD MONEY LOAN IS DIFFERENT THAN TRADITIONAL PROPERTY LOANS

Traditional property loans are based on two factors to decide who is lent money and the other is how much they receive. In these two factors, they also include the favorable credit score and the condition of the property. They also check your income that it meets necessary requirements and can be proven.

A Private hard money loan lender will only check that you have enough equity to use as loan collateral. These loans are expensive, so things have to work according to plan for profits to appear. Because this loan has fewer requirements to get approved, you will find it much easier to acquire than traditional loans.

Final Thoughts

A credit score is a very important thing while financing a loan. If you are interested in exploring the options of private hard money loans but have a bad fico score then our team can help ease the process of the Hard money loan. We help our customers every step of the way. We prioritize informing and educating our clients about the loan process. Our client’s happiness and confidence upon closing a deal reflect our excellent quality services. To find out more information about loans and how we can help, contact us at (818) 322-5626 or (818) 3CA-Loan today! We will run you through the details of loans and hold your hand throughout the process.

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How to Shop for a Stated Mortgage Loan the Smart Way: 3CALoan

Today’s stated mortgage loan is much different than one from 10 years ago. Earlier you could get a loan for 100% of the property value and you could also just state your income and assets. But now it is not possible.  Lenders will call the loans ‘stated’, but they are alternative documentation loans.

Borrowers have to prove their income with their alternate documents. You can’t just state your income, you have to show them something which is common like your bank statement instead of paystubs, W-2s and tax returns. From your bank statement, you can prove the income deposits by your company regularly. So, the lender will check your bank statement to confirm your income. This will be risky for lenders to confirm the mortgage on the term of bank statement because they can’t sell the loan to Fannie Mae or Freddie Mac. Most lenders will keep the loans on their own books. This means they set the requirements, some of which may be different than your standard loan.

Shopping for a Stated mortgage Loan

To shop for a mortgage loan, you’ll need to remember some tips like:

Experienced Lenders

You need the lender who already knows about stated income loan. This is a whole new era of non-conforming loans. The last thing you want is a lender that has never gone through the process.  If you will choose a lender that has already done many stated loans throughout the last few years will generally yield the best results.

Low Rates

You need the lender who offers the best rate according to your situation. It is not important that you are using no document loans so you have to pay higher interest rates. You should search for a lender within 3 or 4 weeks because in this way your credit isn’t hit by too many inquiries and due to this your credit score will not decrease.

Low Fees

With the interest rate low, you also need low closing costs. You can search the lender who offers best closing rates. The closing cost has an important role in the mortgage and it can also affect your annual percentage rate.

Understandable Terms

Try Different lenders before your will start your loan. For a perfect stated mortgage loan, you want a fixed interest rate and not more than 30- years term. For example what you take, if you can afford a 20-year term, you will be better off in the end. You will pay less interest and own your home a lot faster. Of course, you’ll need to prove that you can afford the higher payment first.

Final Thoughts-

3CALoan can help you find a stated mortgage loan fitting your personal and housing needs. Our competitive rates, efficient services, and talented team can help ease the loan process. We help our customers every step of the way. We prioritize informing and educating our clients about the home buying process. Our client’s happiness and confidence upon closing a deal reflect our excellent quality services. To find out more information about stated mortgage loans and how we can help, contact us at (818) 322-5626.

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Commercial Hard Money Loan: 3CALoan

What Does Everyone Mean by Hard Money?

A hard money loan is a loan for individuals or businesses that apply for a loan and can’t get qualified for other types of loans. Private investors or companies issue hard money loans. This type of loan is a specific type of asset-based loan financing, real property secures the funds the borrower receives. Hard money loan lenders are private investors or companies that have funds to issue hard money loan. Hard money lender should be quick to have an advantage of lending opportunities. Private investors or companies issue hard money loans.

Five Major Differences between Commercial Hard Money Lenders and Conventional Lenders

• Interest Rates

Hard money loan’s interest rates are three times higher as compare to a conventional loan.

• Upfront Costs

In the upfront cost, the hard money lender will charge 2% to 5% of the loan amount because you are using their money. In a conventional loan, you will maybe ask for 1% of the loan amount as the upfront cost.

• Loan Terms

The term of Hard money loan is just for 6 to 12 months. In a conventional loan, you can set your term of the loan as five years to thirty years.

• Borrower’s Credit

In Hard money, loans are based on equity of the property but hard money lenders will also check your flaws. In conventional loans, your credit is very important.

• Closing Time

The amount of time to close a loan process is known as closing time. Hard money loans will take 7-10 days to complete their closing process because hard money company is usually a single individual company. A conventional loan will take much more time as compare to hard money loans because they have to do inspections, underwrite the deal and many more.

Three Most Common Commercial Hard Money Questions

Does My Credit Matter?

Hard money lenders have a different process of qualifying the loan, they check the loan in three ways. They look at the area of the house, they check out the property and then they check you that if you have any foreclosures or any bankruptcies. If you have any bankruptcies or foreclosures then you may have to give some explaining to do. So you can say maybe credit matter.

Do I Need to Put Money Down?

In the hard money loans, you need to give some down payment of 20-40% depending on your loan. With this down payment, you also have to pay the closing cost up to 5-6% of your loan amount. In hard money loans there is no 100% financing, so the answer is yes you need to put money down.

What’s the Secret to Getting My Loan Approved?

You need to have a realistic investing exit strategy that everyone involved in the deal agrees with. Everyone involved would be yourself, your lender, the person you’re borrowing your money from, your property manager, and your mentor if you have one. Having everyone agree on an exit strategy will put you in the best position to get your loan approved and your deal closed.

Final Thoughts

If you are interested in exploring the options of hard money loans for commercial real estate investing. Our competitive rates, efficient services, and talented team can help ease the process of Commercial Hard money loan. We help our customers every step of the way. We prioritize informing and educating our clients about the loan process. Our client’s happiness and confidence upon closing a deal reflect our excellent quality services. To find out more information about hard money loans and how we can help, contact us at (818) 322-5626.

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