The short answer, which is also not very specific, is that rates usually range from 10 – 12%. In some cases, we have done deals with rates below 10% but those tend to be cleaner deals.

Before we can accurately answer the question, we need to know some of the details of the loan. Some of these things are: loan amount, purchase price (if it’s a purchase), property value, what type of property and the location of the property. There are other factors that can affect the rate too.

For example, if a borrower has excellent credit, he will be more likely to get a lower rate than if he has never paid anything on time in his life. This doesn’t have as much effect as the equity in the property but can still have some bearing on the outcome.

Ultimately, the rates on private money loans are determined by the investors who supply the money for these loans. Consequently, it is not always possible to know exactly what rate can be given on a particular deal until we actually get it approved. However, we usually have a pretty accurate estimate of what is possible.

So, when you want to know what rate is actually possible on a private money transaction, get the main facts of the deal together and call or e-mail us.

However, there are some instances where paying a debt actually hurts your credit score. Here’s why.

When you have a collection account or a judgment on your credit report, the impact it has on your score is directly related to the age of that account. Unfortunately, when there is any activity on those types of accounts, they are treated as if they are new accounts.

For example, if Joe has a collection account for $100 on a medical bill that his insurance didn’t pay and it first hit his credit in January 2010, it would now be two years old. It would not have a significant impact on his score as long as he had other current accounts since then.

But, if Joe decided to pay that account right now, it would reduce his credit score because the credit scoring program would treat it the same way it did when it was reported.

So the big question is, how do you get these accounts paid without killing your credit score?

The simplest way I have found is to make a deal with the creditor before you pay the debt. If they will agree in writing to remove the collection account upon receipt of payment, you could find a way to scrape together enough money to pay them. This handles the debt and helps your credit.

Judgments are a little different since they are a matter of public record and are much harder to remove from a credit report. Since it seems that these accounts rarely get updated to show they were paid, it is a simple matter of getting proof that the judgment was satisfied.

Keep this proof on hand for any time that you may need it (until the item has fallen off your credit report) and supply that information as needed. Don’t take the time to have your credit report corrected to show you have paid it unless you absolutely have to (which I have never seen).

Use these simple steps to help keep your credit scores higher and, if you need a mortgage while your scores recover, try a hard money lender (like us).

Then, when the market crashed, many people lost those homes and decided never to buy a rental again.

Now that prices have come down to a more reasonable range, there are many areas where the rents will more than cover the mortgage payment, including property taxes and insurance. With positive monthly cash flow now a very real possibility in some areas, some of those people have jumped back into the housing market.

If you take a more in-depth look at the current market, these properties that will give a positive cash flow can give you profit in two ways. Not only do you get the monthly income but, since these properties will also increase in value over the long term, there is also profit to be made in that area.

So, even if you got burned by buying rental property at the peak of the market and swore never to do that again, it is worth another look. If you have the opportunity to buy something that will make you money, it certainly warrants further consideration.

There is a lot of speculation on the reason for the high percentage of all-cash purchases but one could easily arrive at the conclusion that much of the cause lies in the tight lending guidelines being used by the banks. It could also be caused by the volume on homes that are in need to significant repairs.

While many people who are paying cash for homes are investors who are flipping properties, some have found that they can limit their exposure and increase their profits by using private money (also known as hard money) loans.

Because these loans are made by individuals rather than banks, the lending requirements are different. In most cases, the decision for making the loan is primarily based on the equity in the property.

This allows investors to get loans on properties that traditional lenders won’t touch because of the repairs needed. Of course, the properties the banks won’t lend on are the exact properties that lenders want to buy because the profit margins on them are higher.

So, if you want to buy property to fix and flip or even fix and keep, private money could be a solution when the banks won’t lend.

As we all know, prices are determined by the market. When there are more buyers, prices will tend to be higher. Conversely, when there are less buyers, prices tend to be lower. If you think about it, it makes sense that if no one else is competing with you for a house, you are more likely to get a better price on it.

Another reason buying during the winter may be advantageous is the weather. If you look at homes when the weather is perfect, you could miss potential problems that could include small leaks, standing water on the property or similar items.

One more thing that could be a benefit is that real estate agents tend to be busier during the spring and summer so they may have more time for you during the slower time of the year, which means you could also get better service.

If you are considering buying a house, explore all your options. Just because you start looking during the winter, it doesn’t mean that you must buy at that time but it may give you a better deal.

There are specific requirements that must be met in order to be eligible so not everyone who lost a home in foreclosure will qualify. For starters, the loan servicer who handled it must be one specifically named on the list issued by the governing bodies over financial institutions. This list includes Wells Fargo, Bank of America, Chase, Citibank and Countrywide, as well as many others.

Other requirements are as follows:
The home must have been your primary residence.
The mortgage loan was active in the foreclosure process between Jan 1, 2009 and Dec 31, 2010.
Your request for a review must be postmarked by April 30, 2012.

There are many ways that the review process will determine whether or not you had a financial injury and the list given does not purport to be complete but does mention several. A few examples are: 1) You were doing everything the modification agreement required but the foreclosure sale still happened; 2) Fees charged or mortgage payments were inaccurately calculated, processed, or applied; and, 3) You requested assistance/modification, submitted complete documents on time, and were waiting for a decision when the foreclosure sale occurred.

For more complete information, go to http://independentforeclosurereview.com.

It is probably due to the lack of financing available for deals that fall outside the box that the bank loans must fit into. Combine that with the fact that there are a lot of people who have money and want to invest in real estate when it is at or near the bottom of the market and you have a need for things like this.

Now to answer the question, yes, we can do loans for foreign nationals as long as the rest of the deal makes sense. This goes for anyone who either doesn’t have a social security number or who doesn’t have any credit at all.

As full disclosure, anyone who gets a loan must be able to provide identification that complies with the Patriot Act. Don’t worry about learning all the requirements yourself. You can always contact us and we can help you figure out if you or your client have the documentation needed. Most people do.

Please don’t assume that we can do anything regardless of how bad the situation is. The deal still has to make sense. But this is the thing that separates us most from conventional lenders and banks.

For example, banks want proof of where your down payment is coming from and how long you have had it. They also have restrictions on gifts for down payment. In many cases, if you receive a gift, you have to prove not only that it is a gift but the person who gave it to you also has to prove where they got it from.

On the other hand, with private money (at least with us) we do not care if your down payment is a gift and don’t require any kind of proof of how long you have had the money.

There are obviously a lot of other differences in the way we underwrite files. For instance, we don’t have any specific credit requirements and can lend to someone who has a recent foreclosure, short sale or banktruptcy. We can also lend on properties that need repairs made to them before a bank would lend on them.

In summary, the moral of the story is that private money will allow far greater flexibility than any bank loan. Right now, the banks are acting as if they are afraid to lend and look for reasons not to do the loan. In contrast, we want to lend and look for reasons that the loan does make sense.

If you have checked around, you have undoubtedly found that most hard money lenders will not do owner occupied loans. Why is that? Mostly, it is because the lending requirements are stricter than non-owner occupied loans but there are also many lenders who are afraid that if they make a mistake, they won’t get their money back.

There are some who think that it is illegal to do a hard money loan on owner occupied properties. At the other end of the spectrum, there are others who think anything goes because it is hard money. Clearly, neither of these are correct.

In reality, there are a lot of misconceptions about lending laws that cause people to have incorrect ideas of what can and can’t be done.

The truth is that it is legal to do these loans but there are limitations on what can be done and how much can be charged in fees. The limitation on fees can also cause lenders not to want to do these loans. If they customarily charge 5 points, they will certainly have to reduce that on anything that is owner occupied and some people aren’t willing to do this.

Among the requirements that pertain specifically to owner occupied loans are the following:

1) Income must be verified through a third party source.
2) If the loan qualifies as a “high-cost loan”, property taxes and hazard insurance must be collected (impounded) for at least the first year of the loan. (Only the borrower can cancel the impound account, not the lender.)
3) Assuming that the loan qualifies as a high-cost loan, if the lender offers a loan that has a prepayment penalty, the borrower must also be offerred an option that does not contain a prepayment penalty.

Disclosure requirements must also be met so that the borrower knows exactly what loan terms he is getting before signing loan documents. These requirements are the same as loans that are done by the banks.

There are many other requirements that lenders must follow but this should give an idea of some of what goes on in this type of loan.

For example, if there are two borrowers applying for similar loans and one of them has good credit while the other has bad credit, it is not uncommon for the one with good credit to get a slightly better interest rate and to get approved more quickly.

Really, it depends on the investor who is going to provide the money for the loan. Some of them only care about the property and its value while others look at the credit and the borrower’s ability to pay.

A comprehensive look at a file would take into account all of the above factors. One would want to know how much the borrower makes so that he could be reasonably sure that the borrower could afford the payments. He would also want to see the borrower’s credit to determine how the borrower has paid his accounts in the past. Additionally, he would want to be certain of the property value in order to protect him in the event that the borrower doesn’t make the payments and he has to foreclose.

Most private money lenders/investors want to see what the borrower’s credit looks like, not because the score is so important but because they want to know the history. There could be bad credit in the past but if the borrower has a reasonable explanation for what happened, they would be more likely to do the loan. If the borrower has never paid anything on time and has many accounts that are currently delinquent, that could be a signal that the loan that is being requested may end up in default.

Particularly in the recent past and in today’s market, bad things can happen to people’s credit and finances. This shouldn’t prevent them from moving forward, which is why hard/private money can be a good solution to help get people back where they want to be. Even though credit is a barrier in conventional loans, it doesn’t have to prevent people from getting the money they need.