Private Money Home loans vs. Conventional Investor Loans: 3CALoan
If You Need Capital Fast a Private money home loans Loan Can Be the Answer
Many people have misinterpretation about private money lenders and private money home loans. The main confusion is they don’t feel the difference between conventional home loans and private money home loans. In this article, we will discuss many of the general frequently asked questions which will clear all your doubts regarding the difference between conventional home loans and private money home loans.
Frequently Asked Private Money Home loans Questions
How does the program work?
Private money home loans are asset-based loans. This type of loan is issued by the private investors or companies. Private money loans comes secured on the basis of a note and deed to trust for a real estate transaction. We can fund the home loan very quickly. After receiving the final documents from the Title Company, we can fund the loan within the 72 hours. Private money home loans are available for single-family residential houses and as well as for real property including commercial projects.
What is the interest rate?
This will depend on your loan lender that how much they are charging the interest rate. Generally, the range of interest rate is 14% to 18% only annual interest rate payable monthly in most cases.
What are points in a private money home loan?
A private money loan lenders simplify the closing costs by charging points. They don’t have to detail separate other fees or underwriting. Also, they may charge points in addition to these fees.
Do private money home loans allow interest to be deferred to the end of the loan?
Mostly every Private money loans have the interest payable monthly but there are some loan lenders which allow interest to be deferred to the end of the loan.
How long is the loan for?
Private money loans are short-term loans. They are usually a 6 to 12 months term loan, but they can extend from 2 to 5 years as well depending on the lender and your needs.
What are the costs?
The cost of Inspection, Vacant Dwelling, Title Policy, “As-Is” Appraisal & Flood Certificate are required for every loan. Most require Origination points. It will also depend on your loan lender.
Can I get repair money?
Yes, private money home loans can fund repairs.
Does my credit matter?
Private money home loans lenders are not concerned about your credit score. Because they believe in your potential to complete the project and pay back the home loan in time. To determine how much money they will lend, they will check how much repairs will cost. In some cases, your lender may need to check out your credit history.
How do you decide how much to loan?
Every private money home loans lender has their own criteria but the home loans ranges are from $25,000 to $1,00,000.
Do private money home loans need an appraisal?
Yes, private money home loans require appraisal like “as-repaired appraisals” and “as-is appraisals”.
Do private money home loans require inspections?
In private money home loans inspections, the loan lender will check the interior before funding a home loan and before a repair draw to ensure the work is completed in a decent manner.
Do I need to put any money down?
In almost every situation, you will need some cash for your home loan. Because 100 percent finance of the sale price and cost of renovation is not possible in any loan program. In private money home loans cost of Inspection, Vacant Dwelling, Title Policy, “As-Is” Appraisal & Flood Certificate are required to be paid before closing.
How much will my payments be?
Multiply the rate which your lender is charging the loan amount and divide that number by 12. The amount which comes out will be the monthly payment of your home loan.
Will private money home loans finance commercial properties?
Yes, private money home loans lenders finance commercial properties only if the loan is secured by the real property such as the building and land.
Will private money home loans finance apartment buildings?
Yes, Private money loan lenders finance apartment building however it will take lenders longer to get their due diligence done.
How do Private money home loans compare to a traditional non-owner occupied investor loan?
There are many things where private money home loans are better. Take a look at this comparison;
Comparison:
Private money loan Lender/Mortgage Co.
- Time to Close- 1 – 2 weeks /4- 6 weeks
- Monthly Payment ($50k loan)- $583.33@ 14% I/O $549.00 @ 7% + MI
- Credit Qualifications- None /65% of ARV
- Cost to Obtain Loan- 4% – 5% /3% – 6%(Incl. Orig. Fees & SRP)
- Pre-Payment- Yes – 3 months min/ Yes – Up to 2 years
Final Thoughts
In many cases, private money home loans can be obtained faster and easier than other loans. Private money home loans lender has a different program and qualification process. 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.
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 loans, 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 and our specialists will be in touch promptly to answer your questions. 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.
