Re: Realestate Loan #2 ??? - Posted by James Strange
Posted by James Strange on July 19, 2003 at 02:37:12:
To make this simple we deal with two types of lending.
1, Conventional (Banks and other lenders) Banks lend on the lower of the sales price or appraised value. Most of the programs will only lend to set CLTV. CLTV is the combined loan amount (your example only uses LTV). What most conventional lenders are looking for is some of your money in the deal. 100% CLTV programs are available for investors but they require good credit, income. low debts and liquid cash reserves.
2, Equity based lenders. Equity based lenders or Hard Money look at the equity cushion. In the example that you use would make a good deal for an equity lender. You want to try to keep the loan amount lower than 70% of the appraised value less than 65% is better.