collateral based lender blog TZ
Stated income, assets and liability loans are a thing of the past, or are they? No documentation verification type loans created a defecate in the early part of this century that will not be forgotten anytime soon. So, after the real estate crisis of 2008 – 2009 can no verification lending even be possible? Real estate investors may have figured a way around all the red tape if the property type just happens to be an investment property. When it comes to private/hard equity lending the investor has the option to choose what kind of property they are willing to put a lien on. Many hardmoney lenders may tell you that they don’t lend on owner occupied or even that is illegal to lend hardmoney on primary residents. The truth of the matter is that every lender has a product that fits certain parameters based upon their investor pool. If your scenario doesn’t fit easily in their box, then chances are you’re not going to get the best rate or terms, and that is if you don’t get turned away in the first place. Most hardmoney lenders can do the easy stuff such as non-owner-occupied investment property. Does low LTV based on an appraisal selected by the lender’s appraiser sound correct? Property then goes in the name of an LLC and the deal closes pretty quick, that should just about sum it up for more than half of the hardmoney lenders out there.
Though there is niche lending among the niche lenders if you know where to look. Some hardmoney lenders focus on land loans, others focus on construction, fix and flip, commercial property, condo hotel, or even yacht lending. If you sit back and think about for a moment, what does all those different scenarios/deals have in common? If you were thinking non-owner-occupied investment property, you are a hundred percent correct. The reason why investors love this type of deal/investment is because they all can be appraised, insured and are investment property. When a property that is encumbered by a lien happens to be non-owner-occupied investment property, it becomes easy for the investor to foreclose should the borrower default. After all what judge wants to kick a family going through a hard time out on the street? So, is it even possible to get a hardmoney mortgage on a primary residents? The answer to that question is “yes”, though lenders willing to lend hard-equity on primaries are far and few between. Though if you are lucky enough to know one of these investors, they most likely won’t lend on a property that is not owned free and clear, and will have strict guidelines in which to follow.