Bill,
Thanks for the reply.
I failed to mention that the rated quoted ARE noo rates. So with what you are saying, it sounds like a good deal.
Only one problem. They have a five property limit.
I am currently trying to find a lender to work with. I contacted one who is close by (Atlanta) and while he said their terms vary based on the amount of the loan, he gave me some general numbers. Do these sound right to you guys?
He said that they will go up to 90% LTV with 100% financing (NO MONEY DOWN!!) The rates are 11% for 360 months and 10.75% for 240 months. Lower for shorter periods of time.
Here is the part that I thought was rather high⌠He said that they charge from 3k to 5k for closing costs, based on the amount of the loan. When I commented that I thought that was a bit high, he said that itâs only 8 to 10 dollars a month added to the payment.
Do these figures sound right to you all? Any insight would be appriciated. Should I keep looking? I looked at about 10 houses today and will be making my first offers this week!!
While I am trying to do them âno money down with owner financingâ, I want to have a lender lined up just in case.
William:
This does sound good, especially with n.o.o. Could you share who this lender is with the rest of us? Iâm sure that it would be appreciated. Thanks.
Re: Are these good terms??? - Posted by Bill K. (AZ)
Posted by Bill K. (AZ) on June 15, 1999 at 23:49:14:
William,
I have been reading that hard money lenders are usually only willing to go 65, maybe 70, percent loan-to-appraised value. So, if you purchase low enough, you might be able to get 100% financing since it would equate to 70% of appraised asset value or less. These lenders usually look to the value of the asset for their security, and they charge anywhere from 0 to 5 points of the loan amount. In addition, interest rates vary from 12-15%. Opting for a higher interest rate may reduce the number of points you have to pay.
Iâve also heard of 90% non-owner occupied (NOO) loan-to-value (LTV) loans. I am not aware of any 100% NOO LTV loans, but that doesnât mean that they donât exist. Iâm just not aware of any. In either case, both of these types of loans usually require qualifying by the borrower since the asset might not provide enough collateral to satisfy the lender.
Based on your information, the rates you were quoted sound great! However, you donât mention whether the terms you were quoted are âowner occupiedâ or ânon-owner occupiedâ. My mortgage brokers have quoted me rates similiar to what you are referencing; however, it is for my buyers, i.e.: owner occupied.
No matter, you should always remember that itâs NOT the cost of money thatâs importantâŚitâs the availability. If these terms are truly available to you, make sure that you invite the lender to dinner ASAP. Remember, you arenât going to be paying 12-15% for 30 years, just a few months. So, if youâve calculated your holding costs properly, it really doesnât make a big dent in your profit.