Non-bank Lenders, Are They For Real?
just got off the phone w/ some lenders on tci. They call themselves non-bank lenders, and are willing to lend to anyone w/ a credit score of 500 or higher. They look for properties over 1 million, require 0 down, and are willing to write the closing cost into the loan. THe lender said the int rate is 9.99% for 30 years fixed, and will loan as long as the cap rate is at least 10%.
my question is:
are they for real?
has anyone used similar lenders?
anyone do a zero down, and still be positive or they do it mainly to flip?
Yes they are for real. But watch out for the slimy ones that collect down payments, fees, and deposits, and then do nothing or make it so you canot close.
You also need to ask them the LTV that they loan on, then how much of that they will lend. This will fluctuate based on your credit, a 500 credit will give you 50%, 600-60% etc etc .
Also make sure that you have your deal under contract so that they cannot steal it. I went to one of them for a loan and the seller had 4 offers in a week. Pretty good since it wasnt advertised for sale, and I talked the guy into selling it to me.
It can be done, but you need to make sure you arent dealing with an unscrupulous lender looking to steal your deal, or make you false promises just to collect fees.
Think of it this way, why would someone loan a bad credit person a million bucks? Obviously there intent is to either foreclose, or they never plan to lend in the first place.
I cannot give you a list of lenders to run from, but if you PM me with a company name, I could tell you if I have had business with them before. As a moderator I cannot recommend any one lender, conversely I cannot talk bad about a potential advertiser on open forum.
If your deal is 70% or less of FMV, Your credit is above 650, then you can get a hard money loan from any respectable source. You will be charged 5-10K for there services, and that should be the only out of pocket payment. This will include an appraisal and there site visit. You should also make sure you get a copy of that appraisal should the lender not want to do the deal. Everything else, points, etc should be lended by them at closing, if they are a no money down dealer. You may want to check into the survey, and environmental as well, and see if they are going to pay for it or are you. I would ask for there standard closing document list to make sure there isnt any unreasonable requests, and also if you can afford to do the deal by paying for everything on there. One lender out of New Jersey gave me a 54 item checklist, that would have cost over 100 grand to complete, making the deal impossible to close, in turn releasing them from any legal responsibilities.
Good Luck,
Kyle[ Edited by KyleGatton on Date 06/18/2004 ]