Your loan amount is VERY EXTREMELY low for most lenders. They like to have their 1% loan origination fee be at least $1200-$1500. If it isn’t, that’s when they start adding on the points to make up for it.
Contact Ed Garcia to see if he can help. He’s on the finace board part of this site now I understand.
I would say shop around, but I think you’ve posted in the past you’re in a fairly small town area, but I’d still check with all lenders who do loans in your area.
Seems like I’ve also read here that you have to find the right lenders who understand the LO situation and who iwll treat it more as a refi. However, that only applies to the down payment. The loan costs are pretty much the same whether a refi, or a new purchase.
A loan, is a loan, is a loan, with a traditional lender. They want their loan origination fee, and all other costs need to be covered too.
L/O’s not being treated as refi’s - Posted by Dee-Texas
Posted by Dee-Texas on October 22, 2000 at 20:40:21:
I have read in most every course that after a T/B’er option period is over, most banks will view this as a refi. I’ve got two to three coming due in the next three months and am already have mega problems with banks, mortgage and savings and loans.
They are charging points and down…it doesn’t matter that I have taken option consideration and held the note for 1-2 years, they are making my buyers jump though all of the hoops with a hefty down. One of the mortgage companies quoted $5,895.00 for closing on a $31,400.00 loan to my T/B’er! One of the selling features was that it would be easier for them to get a new loan, which has not been the case.Even though he now has B+ credit, pays on time each and every month and is manager of a company here.
Any help or ideas anyone?
I never mislead anyone I have my reputation to honor this is really worrying me.
Thanks to All.
Dee-Texas
Posted by JDenney on October 23, 2000 at 24:30:28:
I have run into the same problem because the bankers in my conservative small town do not understand anything other than a standard purchase. You will have to find a good mortgage broker that knows of banks that will do what you want (they may be cross country). The loan to value being based on the appraisal, not the purchase price is the key. Closing cost can be wrapped in the loan if the appraisal and ltv are high enough. Forget about your lenders they obviously don’t have the connections to the right banks. Call all the mortgage brokers in the biggest city near you and tell them exactly what you need to happen, also talk to members of your local r/e investors club to see who they are using. If you would like my mortgage brokers # just e-mail me.
Good luck and good hunting, Jeff
Option consideration may be used as downpayment money even if the loan is treated as a new purchase.
Rent credit in excess of fair market rent may be used as part of the downpayment on a new loan. You may need to substantiate fair market rent in the appraisal (a more costly appraisal).
The buyer will need to come up with closing costs + down payment less the total of the two above. If he can’t do so, pay his closing costs for him…taking it back in a note. How much could it be?
Give Ed Garcia a call. He handled a lease/option deal for me a few months ago. He loves these $30K deals!