The real estate market here in California seems as if it is well on the way to recovery. This is good news for most, with an ancillary benefit in my line of work being increased loan to value ratios on purchases.
For hard money lending over the past number of years, loan to value ratios have been fairly conservative. 60% loan to value caps were not uncommon not long ago, and today many firms are capping loan to value ratios at 65%. This means that a buyer of a property with hard money financing had to put down at least 35% on a purchase.
With the improving market, however, we have been able to expand the hard money loan products we can offer our clients. One of the biggest moves has been our purchase money loan options. We have options that will lend 75% of the purchase price (or value of the property, whichever is less) with terms ranging from 9 months up to 3 years. In addition in some areas we can increase that loan to value depending on the strength of the borrower and location of the property.
This is a big move from what was available even a year ago. In addition to the higher loan to value ratios, these 75% purchase money loans also are very competitive with regards to rate. Depending on the package and term selected as well as a borrowers credit score it is not out of the question get rates down into the single digits.
Of course we still offer our hard money fix and flip loans for properties here in California, with programs that will lend as much as 65% of the after repair value for investors who need even more aggressive financing. Those programs, however, are short term, typically 12 months, but are not capped by the purchase price of a property.
If you are in need of financing for real estate here in California and are unable to obtain bank financing (or don't have the time to wait for bank financing to close), give us a call to discuss how we can help. We have many options for most types of real estate financing here in California. You can also learn more about our California hard money loans by visiting us at acalending.com.