Creative Financing: A Pinellas County Stop Foreclosure Strategy

Creative financing is one of the options considered by many as a Pinellas County stop foreclosure strategy. If you are unfamiliar about what creative financing entails and the various forms it takes then here are several essential facts that you should know.

For Real Estate Purposes

More often than not, creative financing refers to alternative financing options for real estate concerns. The aim with creative financing is to obtain as much funds as possible for financing or purchasing a real estate property without relying on the applicant or debtor’s own money. 

Types of Creative Financing for Pinellas County Stop Foreclosure

You can prevent your property from being foreclosed through creative financing. It’s an option well worth considering if you find doors for traditional financing closed to you for whatever reason. 

Hard money loans

Also known simply by its abbreviation HML, hard money loans are – naturally – obtained from a hard money lender. A hard money lender obtains his funds, on the other hand, from his own network of contacts and which likely includes both traditional financing providers as well as private lenders.

Hard money lenders charge above average interest rates as well as requiring loan applicants to pay up front fees for financing. Hard money lenders don’t care about your credit score, source of income, or debt-to-asset ratio but they can also be quite ruthless in ensuring that you pay the correct amount on time.

Private loans

These are offered by private lenders or private individuals like you. They, too, charge above average interest rates. Their loans are often short term in nature, ranging typically from six months to no more than three years at most. Unlike hard money lenders, however, private lenders base their approval on your asset or financial standing but disregard your current credit score. 

Private loans are also made on a LTV or loan-to-value arrangement. Generally speaking, you cannot borrow more than 70% of the accepted market value of your asset or property 

Subject-To Transactions

This, indeed, is one of the more “creative” options. Rather than allow the bank to confiscate your property for foreclosure, you can sell your home instead while “unofficially” transferring your loan obligations to the buyer.

The process can be mutually beneficial as the homebuyer doesn’t have to go through the often arduous process for loan transfers and applications. As for seller benefits, you also get to quickly come up with the funds to pay off your debt and prevent having foreclosure records mar your credit history. 

It’s one of the riskiest Pinellas County stop foreclosure strategies, however, and as such something you should enter only with careful thought and consideration.

Pinellas County Short Sale Realtor – I can provide you with information about how to avoid a foreclosure, explain the effects it can have on you and your family, and offer other options that may be available to you. This includes a short sale, and we can help you determine if you qualify. For more information, visit http://www.wendysmithshortsales.com/ or call 727-452-3301.