Posted by Ed Garcia on November 27, 1999 at 21:00:11:
Cosmos:
Now that’s an interesting name, Einstein would appreciate it.
I don’t think it’s a matter of what lenders want, but a matter of what we are
willing to go through to get our loan.
Of course the easier we make it for the lender, the easier it is for them to interpret
our loan package, and qualify us for a loan. (The old keep it simple stupid.)
If I go as an individual, with a 4 year job. That’s pretty easy to verify.
They can check our credit, see our assets on our application, see our stability as a
borrower by verifying the 4 year job. See how long we have been a home owner,
or living in the community, verify our income. And feel comfortable that we are for
real. It’s a no brainer, they know what kind of borrower they are dealing with.
Once I introduce a Corporation, it’s a whole new ball game. Now if I have a Corp.
That is established with assets, income, credit, and stability (meaning it’s been around for
a while). No problem. The problem is that everyone wants to start a Corporation and
borrow through it from day one when the corporation is like a new unqualified borrower.
So with that in mind, The way to do it is borrow using both you and the Corporation in
order to establish your corporations credit. Or, you can borrow under your Corporation
and personally guarantee the loan.
When dealing with Mortgage Companies, which is a lending environment that sells it’s loans
in the secondary market. Yes, Being an employee is easier for them to sell off your loan.
But if you are willing to produce the paper work required as a Corporation, because it’s to
your advantage and will help you shelter your family or assets, that has to be taken into
consideration as well.
One thing we should not do. And that is be intimidated by the paper work required in order
to do a loan. Instead we should learn to understand it, and realize that these lenders who are
requiring this information to protect themselves, are in directly protecting us. The questions
they are asking us, we should be asking ourselves.
It’s like me when I bought my new computer. When something goes wrong, I freek.
The reason I do that is because I don’t know anything about computers.
Now that I have been using my new computer, I still freek. So I guess I have a lot to learn.
But the point is, once we learn our product or business, we will over come our fears.
Ed Garcia