Hard Money Home Loans– Owner Occupied Vs. Investment: 3CALoan
Hard money home loans in California are 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. You should learn few things about hard money loans or you can contact any hard money lenders in California before you opt them so you can avoid pitfalls and sticky situations. Hard real estate loans are short-term loans secured by real estate and the interest rates are much higher as compare to traditional financing.
Options to Bank Home Financing
I have many questions regarding hard money home loans for residential properties. Funding loan from a bank is not possible with many people, so hard money home loans have become an alternative to funding a home loan. Hard money home loans also become an option even for those who have may have been able to obtain bank financing in the past. There are many differences between hard money home loans for consumer purpose and for investment purpose.
Income Documentation
Income documentation is mandatory for consumer lending on residential property of 1-4 units. We must be able to take all the income documents of the borrower and from that documents, we will ensure that their debt-of-income ratio is in line. This is different than hard money home loan lending used to be for this type of loan. In the past, lend-able equity in the property was the main requirement. But now, with that, we also required income documentation, so that we can calculate the debt to income ratios.
While income must be documented, we have some flexibility to how the documents need to be listed. Documents like tax returns, W-2’s, pay stub, etc, are all acceptable. We can also happy with the bank statements or any other third party documentation which shows the borrowers income.
Bank Lending Practices Have Changed
We all know that from last five years there has been an inundation of mortgage regulations. Regulations are still being written and phased in, so we are not done with those regulations. To curb irresponsible lending and subprime lending practices by institutions, these regulations were meant. These regulations do also apply to hard money loans. Many people who want to fund their loan with hard money home loans are usually unaware of the changes of regulations. They think hard money home loans lending don’t have same regulations as bank money. Many people have this issue with the banks that they believe hard money can avoid is the documentation of income.
Hard Money Loans Fees Passed to Borrower
The cap on fees and rates is another issue that we have with these types of consumer loans. In hard money home loans, all the fees are passed through to the borrower but not in the bank money. In addition, the financing source is ordinarily an end investor trying to find a return on his/her money more prominent than they can get somewhere else. Making these type of consumer loans for small balance loans is difficult due to these aspects of hard money.
Final thoughts
For those looking for hard money for non-consumer purposes, some of these issues do not apply. We know that sometimes people have a harder time for getting a loan. That’s why we offer multiple different alternative financing options. You have to be careful and avoid making any costly mistakes. Our competitive rates, efficient services, and talented team can help ease the process of the home 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. Our goal is to provide opportunities for people to meet their financial goals.
3CALoan local mortgage broker provides no tax return home loan which is also called no tax return, without tax return, without tax return, private hard money home loan, private hard money loan, bank statement home loan, bank statement loan, equity loan and many more. If you still have any doubt, you can contact us at (818) 322-5626 or (818) 3CA-Loan today! We will run you through the details of home loans and hold your hand throughout the process. We only have one aim of helping people first.
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