Finding California owner occupied hard money lending has been difficult at best over the past few years. With all of the changes in the lending world, many hard money lenders simply stopped making owner occupied and/or consumer loans secured by 1-4 residential units. It has been only recently that we’ve started making these owner occupied hard money loans again, and I wanted to take a moment today to go over what we are able to help with.
Hard money loans are typically thought of as no-doc loans. That is not the case any longer, especially when talking about owner occupied or consumer lending. For us to be able to help with a loan of this nature, income must be documented. We are flexible with the manner in which we must document the income, but we have to verify the borrowers’ ability to repay the loan.
Hard money loans also are typically thought of as non-credit driven. In today’s lending world, while that holds true to some extent, on owner occupied financing credit does play a part in determining the product. Typically the credit will have an impact on our maximum loan to value. It may also have a slight impact on the rate or fees.
With good credit, we can potentially finance a borrower on a purchase transaction up to 70% of the purchase price. For comparisons sake, assuming everything else in equal, someone with a poor credit score may be capped at 55-60% of the purchase price. In addition, with excellent credit we can get rates down into the single digits (although typical rates are going to be between 10-12%).
While this type of financing is not perfect, especially considering conventional loans are going out the door at 4% or better these days, it does offer an alternative to borrowers who are unable to obtain financing from the banks for whatever reason.
Please visit us on the web to learn more about California hard money loans, or give me a call directly with any questions or scenarios.
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