Shawn Molem – Page 21 – Hard Money

February 24, 2016
Shawn Molem
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Questions on Hard Money Loans

Q 1 What Loan-to-Value are Hard Money Lenders looking for?
Typically a loan does not exceed 70% of the after-repaired-value (ARV). This figure is calculated by an appraiser and consideration of repairs.

Q 2How long is the loan for?
Typically write the notes from 3 months to 12 months depending on the Lender and your needs. Longer the term can lead to increased costs or interest rate.

Q 3 what are the costs?
All loans will require Title Policy, Insurance, and Appraisal. These services come with fees that can range from a few hundred to a couple of thousand dollars. Most require origination points ranging from 2 to 10 points.

Q 4 Do I need to put any money down?
In most cases, Yes Most lenders want to ensure that you have enough resources to finish the repairs and cover the costs of the loan plus any surprises. Expect to pay all origination/discount points and other costs at or before closing. If you cannot afford to close you typically cannot afford to take out this type of loan.

Q 5 How does Hard Money compare to a traditional non-owner occupied investor loan?
This would be like comparing apples to oranges. Hard Money has a very specific purpose. Typically these loans are for quick turnaround or after repair situations. Conventional financing is used for your traditional rentals and long term hold scenarios. As the foreclosure market increase you will find investors to use Hard Money as way to secure the property in a short period of time then refinance into Conventional finance.

To learn more about our financing solutions for Hard Money Loans, please call us at (323)655-6888 or visit us at www.magnaloans.com

February 15, 2016
Shawn Molem
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VA Loan Tips to Help You Land Your Dream Home

Category : VA LOANS

Tip 1: Start without a COE

You don’t need to have your VA Certificate of Eligibility to start the VA loan process. It’s common for lenders to get this document for you a little later down the road. By all means, you can certainly obtain yours if you’re concerned about your entitlement amount or just feel better having proof of your benefit. Using the VA’s eBenefits portal is typically the quickest way when possible. But don’t let the absence of your COE stop you from contacting a VA approved lender like Magna Capital Group to start the prequalification and preapproval process.

Tip 2: Scour your credit report

Your credit profile will play a crucial role in your ability to land a home loan and the type of rates and terms available. Before you pursue loan prequalification, get a free copy of your credit report. Examine it with an eagle eye for errors, which can be anything from accounts that aren’t yours to reporting errors regarding late payments. About a quarter of all credit reports contain errors serious enough to derail a home loan, according to the U.S. Public Interest Research Group.

Tip 3: Your credit score isn’t your credit score

Your free credit report will not contain your credit score. This is something you have to pay to see, and as far as mortgages go it’s often best to not waste your money. That’s because lenders see different scores than consumers, and they use a formula weighted especially for mortgage lending. What your loan specialist pulls can and often does look different from the “consumer” score you shelled out money to see. The only way to really know where you stand is to have a lender pull your credit.

Tip 4 Preapproval is key, but it’s not a guarantee

There isn’t a ton of sense in looking for homes before you’ve got a clear idea of what you can afford and how much a lender is likely to extend. VA loan prequalification and preapproval will help with exactly that. Preapproval in particular is important in that it shows sellers you’re a serious candidate who’s likely to make it to closing day. A prospective VA homebuyer with a preapproval letter is a welcome sight among home sellers and real estate agents.

Tip 5:: Find a VA-Savvy agent

VA loans are an incredible benefit for those who’ve proudly served our country. They’re also a specialized product that some real estate agents and lenders are more familiar with than others. You don’t want a novice in your corner when the time comes to utilize these hard-earned benefits. A real estate agent who understands the promise and potential of this program can save you time and money in a host of ways. One of the most important is by steering you away from properties that could pose problematic for the VA appraisal process, which can save borrowers time and money.

To learn more about our financing solutions for VA Loans, please call us at (323)655-6888 or visit us at www.magnaloans.com

February 2, 2016
Shawn Molem
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How to Identify Fraudulent Hard Money Lending Practices

Category : Uncategorized

In Hard Money Lending industry, fraudulent lending practices commonly occur. If you are considering a hard money loan, here are a few things to consider about identifying fraudulent hard money lending practices.

Excessive Fees

One thing that you will definitely need to look out for is when a lender charges excessive fees. While there will be some fees associated with getting a loan, you should not have to pay excessively for these fees. In order to see if the fees that are being charged are excessive, you need to shop around with different lenders. Compare the different fees that are being charged by each. This should give you an idea as to what the market rate for certain fees are. If the lender that you are considering working with is charging significantly more than every other hard money lender in the market, you should most likely stay away from him or her.

Loan Points

The hard money lending industry is significantly different from the traditional loan industry. Therefore, you will notice many different things about how the loans are structured. Sometimes, hard money lenders will take a page from traditional lenders and charge loan points. However, if you can avoid borrowing from a lender that charges loan points, it would be for the best. Traditionally, loan points are required by lenders in order to buy down the interest rate and accommodate for questionable credit. However, the whole idea behind a hard money loan is that you do not need good credit in order to qualify. This means that you should look questionably at any hard money lender that is willing to charge you points to give you a loan.

Upfront Fees

In most cases, a legitimate hard money lender is going to allow you to pay most of the money that you owe him or her on the back end. This is why most hard money loans are set up as balloon loans with interest-only payments over the life of the loan. However, some hard money lenders will ask you to pay a large fee up front. Any time a lender asks you to pay a substantial fee on the front end of a loan, you should be very skeptical.

For Best Deals on Hard Money loans get in touch with us : Magna Capital Group Tel: (323) 655-6888

December 21, 2015
Shawn Molem
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Qualifying for a Hard Money Loan

Category : Hard Money Loans

Qualifying for hard money loans tends to be more straight forward than traditional loans. When looking at hard money loans, remember that hard money lenders are themselves investors. When hard money lenders evaluate loan opportunities they are looking to maximize returns and minimize risk – just like every investor. While hard money lenders would love their borrowers to have great credit, it isn’t the number one factor they use to evaluate lending opportunities. The top factors hard money lenders tend to look at are property fundamentals and equity. They want to know that in the event the borrower defaults and they have to foreclose on the property, that they will be able to recover their investment. They will look at things like the rental marketability of a property, cash flow, and so on. This is great for investors, because if you find a great investment opportunity, it is likely something that hard money lenders are going to be willing to fund.

Along with property fundamentals, hard money lenders are also looking for equity. Typically hard money lenders aren’t going to lend more than 70% of a property’s LTV. For investors, though, there are hard money lenders that will lend based on repaired or remodeled value. Again, hard money lenders can be a lot more flexible than traditional lenders. As long as an investment makes sense to a hard money lenders, they may fund the deal. They certainly have some guidelines they like to use and keep to, however, at the end of the day they can be flexible if they see an investment opportunity that makes sense.

November 18, 2015
Shawn Molem
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Top 5 mortgage tips

Category : Mortgage Loans

Maintain your credit profile

In the months leading to your home purchase, avoid changing your credit obligations, especially between a preapproval and the closing of your mortgage. The reason? It could hurt your credit score in a way that would raise the rate and fees related to your loan or, at worst, keep you from qualifying altogether.

Don’t close or open any credit cards. Keep balances on your credit cards within normal range so it won’t mess with your debt-to-income ratio, a key factor in determining mortgage rates. And don’t buy a new ride. The car company doesn’t care if you have a house, but your mortgage lender cares if you have a big car payment

Don’t move money around

In the months leading up to your home purchase, keep your hands off your finances. That includes moving money from a savings account into a certificate of deposit, or CD. It also means no cashing in investments from stocks, retirement accounts or CDs. Otherwise, you will create a huge headache for yourself as you try to show the bank the paper trail of where that money came from. In a similar vein, avoid paying off debts with savings because that could cause your lender to worry about how you will pay for closing costs.

Get your gift early

If a family member is gifting some or all of your down payment, make sure it’s deposited in your bank account more than two months before you apply for a mortgage. That way, the bank won’t need to source the large deposit. Otherwise, the gift-giver will need to sign a gift letter, stating that the money is indeed a gift and not a loan. The giver also will have to provide the bank with a copy of the check before closing and verification that they have the funds to give by supplying either bank statements or a letter from the giver’s bank

Get organized

Gather and keep every piece of financial paper in the two months leading up to buying a house. That means pay stubs, bank statements for savings, checking and investment accounts, W-2s, tax returns for the previous two years, canceled rent checks and any mortgage or property tax statements for other property you own

Get creative with a reverse mortgage

Older homebuyers, especially those with fixed incomes, may want to consider a reverse mortgage to buy a home instead of draining retirement funds. A reverse mortgage lender contributes up to 52 percent of the sales price of a new home, while the senior, who must be at least 62 years old, comes up with the rest. The house is titled in the borrower’s name, but the lender retains a security interest in it. There are no monthly payments, and when the home is sold or no longer the borrower’s primary residence, the reverse mortgage must be repaid. Any remaining equity belongs to the borrower, heirs or estate.

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