What To Do If Bank Denied Your Mortgage Loan Application?

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What To Do If Bank Denied Your Mortgage Loan Application?

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Category : Hard Money Loans , Mortgage Loans

If your bank has rejected your mortgage application, it means there is something wrong with your financial records. You might want to know what to do next, why were you denied, how long do you need to wait before applying again, and what steps can you take to prevent it from happening again? It’s important to know the real causes of your loan rejection because it will probably continue to happen if you don’t take action.

Here are some important steps that you should take after your mortgage loan rejection:

Find Out Rejection Factors:
The first thing you should do is find out exactly what happened. Once your mortgage loan application denied, the bank is required to provide specific reasons in writing within 30 days explaining why they’ve been turned down. The most common reason for mortgage loan application rejection is either insufficient income or bad credit. This step will help you to know the actual causes of your loan rejection and make the right decisions without repeating the same mistakes, so that your loan application may get accepted in the future.

Understand The Problems and Fix Them Quickly:
To avoid your future loan rejection, it’s important to understand the actual reasons for your previous loan rejection. This is a very helpful step if you’re considering re-application in the future. Once you identify the problems, take the necessary steps to make it right. Make sure that your credit history and monthly income is up to the eligibility criteria. If you cannot fix these issues, then you might want to consider the next step.

Check With Other Mortgage Lenders:
If you’ve been denied by the bank, it doesn’t mean every lender will reject your application. There should be many hard money lenders in your locality who can help you out. They can provide you better loan programs that can more accurately fit your financial requirements.

The Bottom Line:
If you are unable to fix those issues due to which your loan application was denied by the bank, hard money loans would be the best choice for you. A hard money loan is simply a short-term loan secured by real estate that can be obtained faster and easier than a conventional loan. Hard money loans are backed by the value of the property, not by the creditworthiness of the borrower.

Hard money loans are very beneficial for those who cannot qualify for conventional loans cause of their poor credit score or bad financial records. If you need quick financial solutions and cannot wait for or do not qualify for conventional banking approvals, you can apply for hard money loans. The loan application is very simple and quick. Hard money lenders typically take one to two days and may even be approved the same day.

Magna Capital Group, Inc. provides private money financing on residential and commercial properties of all types throughout California. With over 35 years of experience in the real estate industry, we provide unmatched expertise in customizing a loan structure to meet our client’s specific funding requirements with minimal documentation. If you have any questions about our hard money loan programs, feel free to call us now at (310) 734 4044 or email at info@magnaloans.com.

10 Important Things You Should Know About Hard Money Loans!

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Category : Hard Money Loans

A hard money loan is a type of quick financing secured by a property. Real estate investors have long used hard money loans to finance their real estate investments for reasons of speed and flexibility. But for those who have never taken out a non-traditional loan before, here are 10 important things they should know about hard money loans:

1. Process for Hard Money Loans:
Hard Money Loans provide Investors access to capital to purchase investment properties. The application for a hard money loan is very simple. Hard money lenders typically take one to two days and may even be approved the same day. Hard Money is available for adequately collateralized loans on single-family residential houses and other Real Property including commercial projects. The simplicity and straightforwardness of a hard money loan has made it a popular choice for real estate investors and house flippers.

2. Interest Rate:
The interest rate for hard money loans varies from lender to lender. Usually interest rate ranges from 10% to 18% interest only annual interest rate payable monthly in most cases. Some Lenders will defer interest payments to payoff, benefiting investors that do not want payments during rehab.

3. Loan-to-Value (LTV):
Hard money loans are backed by the value of the property, not by the credit worthiness of the borrower. With a hard money loan, a borrower can borrow 65-75% of the property value. With most hard money lenders, the loan to value is determined through either an appraisal or a broker opinion of value.

4. Loan Terms:
A hard money loan is simply a short-term loan secured by real estate. The loan terms are usually around 12 months depending on the Lender and your needs, but the loan term can be extended to longer terms of 2-5 years. Longer the term can lead to increased costs or interest rate.

5. Loan Costs:
The costs will vary based on the loan amount. 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.

6. Credit Scores:
Credit Scores are considered but lenders set their own criteria for “acceptable credit” and will be more receptive to “common sense” credit review. Private Money Lenders look more at the situation and the cause of the credit flaws and rely on the collateral and higher points and rate to mitigate risk.

7. Hard Money Loans for Repairs:
Yes, hard money loans can opt for repairs also. Most hard money lenders require a draw request form to be filled out to identify the completed repairs to the property, copies of the invoices from the contractors or sub-contractors. After work is inspected, draws can be dispersed. Typically work is not paid in advanced.

8. Down Payments:
In most cases, you need to put money down. Lenders want to ensure that you have enough resources to finish the repairs and cover the costs of the loan plus any surprises. Therefore, most hard money lenders require that origination/discount points and other required items be paid at or before closing. They are confident that if you cannot afford to close you typically cannot afford to take out this type of loan.

9. Prepayment Penalties:
Traditional financial institutions often charge hefty prepayment penalties if circumstances change and a loan is fully or partially repaid before the due date, but private hard money lenders are fully invested in your success and typically structure loans without prepayment penalties or added fees.

10. Loan Flexibility:
Hard money lenders are flexible can structure repayment and collateral release terms in ways that are mutually beneficial to both borrower and lender. They always believe greater flexibility often results in better outcomes.

The Bottom Line:
If you need fast access to capital for real estate investments then hard money loans are great option for you. Hard money loans can be obtained faster and easier than a conventional loan and while in almost all cases the amount you can borrow from a private lender exceeds the amount you can qualify for from a convention lender the cost difference is minimal.

Magna Capital Group, Inc. is one of the leading hard money lenders in California. Through our global network of relationships, we identify and implement a wide range of real estate and financial transactions. We have extensive experience in placing conventional & private money financing on residential and commercial properties of all types. If you are considering for a hard money loan, please feel free to contact us today at (310) 734 4044 or Email at info@magnaloans.com.

Fix and Flip Loans – The Fastest Financing Option For House Flipping Business!

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Category : Fix & Flip Loans

A fix and flip loan is a short-term financing tool that enables a real estate investor to obtain the necessary capital to acquire, make repairs and improvements and then sell the property quickly for a profit. Fix and flip loans are also known as hard money rehab loans, investment property rehab loans or house flipping loans but the purpose of these loans remain the same. Fix and flip loans are either based on the current value of the property or the after repair value, but most of the fix and flip lenders prefer to loan on the current value of the property as this reduces their risk in the event that there are issues with the rehab of the property, the estimated after repair value was incorrect or the real estate market begins to decline during the rehab process.

Fix and flip financing is available from hard money lenders but not available from traditional lenders such as Banks. When applying for the fix and flip financing, the hard money lenders may consider the following about the borrower:

  • Experience in real estate and fix and flip projects
  • Purchase price of the subject investment property
  • Amount of cash reserves available for holding costs and rehab costs
  • Estimated after repair value of the property
  • Estimated cost of the renovation

Why choose a fix and flip loan?

If you are an investor or flipper interested in buying properties that require all cash or hard money to fix and flip, then only a fix and flip hard money loan can help you out. Here are some significant advantages of fix and flip loans:

  • Fix and flip private money loans provide up to 80% of the total project cost, which is the purchase price plus the cost of the rehab
  • There no pre-payment penalty which allow you to sell the property as quickly as possible
  • Fix-and-flip financing up to 12 months
  • You can qualify for fix and loans with low FICO score or even if you’ve been turned down before
  • Fix-and-flip loan rates between 7%-12%. All rates are based on the individual property and borrower. Call us to know more at (310) 734 4044
  • Quick approval and funding, 24 Hours for Approval and 7 to 10 days for Funding
  • Loan amounts: $500,000 to $50,000,000
  • No limit on the number of properties
  • Loans are available to individuals, trusts, corporations, and limited partnerships
  • Single-family residence, 2-4 unit properties, condominiums and townhouses properties are eligible for fix and flip loans
  • No hurdles- a very user-friendly and streamlined process
  • No appraisal fees (in most situations) and no hidden junk fees

The Bottom Line:
Fix and flip loans are always the most attractive option for short-term financing requirements. If you want to get into the home flipping business but don’t have the cash on hand, a fix and flip loan may be what you need.

Magna Capital Group, Inc is one of the top private money lenders in California with over 35 years of experience in residential and commercial loans. We offer fix and flip loans on very competitive rates with quick approval and funding. We have proven to be reliable fix and flip lenders and earned many satisfied repeat clients.

For more information about fix and flip loans, Contact Magna Capital Group, Inc. now at (310) 734 4044 or email at info@magnaloans.com and get your hard money rehab loan funded fast.

Top 5 Situations For Whom Hard Money Loans Are Ideal!

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Category : Hard Money Loans

Hard money loans are quite different from bank loans. A hard money loan is simply a short-term loan secured by real property. The terms are usually around 12 months, but the loan term can be extended to longer terms of 2-5 years. The loan requires monthly payments of only interest or interest and some principal with a balloon payment at the end of the term. Interest rates for hard money loans range from 10-15% and points can range anywhere from 2 – 4% of the total amount loaned.

The amount that hard money lenders are able to lend to the borrower is primarily based on the value of the subject property. Many hard money lenders will lend up to 65 – 75% of the current value of the property. Some lenders will lend based on the after repair value (ARV) which is the estimated value of the property after the borrower has improved the property. A borrower can get a hard money loan on almost any type of property including single-family residential, multi-family residential, commercial, land, industrial many other types of properties that fall outside of the conventional parameters likes rehab loans, construction loans, bridge loans, land loans, mixed use property, non-owner occupied rentals used to secure startup capital for new ventures.

Hard money loans are ideal for below top 5 situations:

1. Fix and Flips
2. Land Loans
3. Construction Loans
4. When the Buyer has credit issues.
5. When a real estate investor needs to act quickly

Why should use a hard money loan?

Borrowers choose to use hard money loans for many different reasons. Hard money lenders have the ability to fund the loan quickly. In most situations, hard money loans can be funded within a week. The ability to obtain fast funding is a significant advantage for a real estate investor. Especially when the real estate investor is trying to acquire a property with many competing bids, a quick close with a hard money loan will get a seller’s attention and set their offer apart from the rest of the buyers offering slow conventional financing.

Hard money loans are backed by the value of the property, not by the creditworthiness of the borrower. Borrowers who are rejected or cannot find conventional financing due to their low credit score, bad income history, a recent foreclosure or short sale, they can still obtain a hard money loan if they have sufficient equity in the property that is being used as collateral. The hard money lenders provide you flexible loan repayment terms. So, if times are tough you can get by with only paying interest each month or with only paying the balloon repayment at the end. This makes it easier for you in the long run instead of causing you to make a hefty payment each month.

Conclusion:

Hard money loans are the faster route to financing than bank loans. They have relaxed approval standards, are fast to get, and require less paperwork. Hard money loans may be wonderful for you when you need them in a crunch and can’t get the money from anywhere else.

You can consider a hard money loan to fund one of your future real estate deals. If you have questions or would like to receive additional information about hard money loans, please contact Magna Capital Group, Inc today at (310) 734 4044 or email at info@magnaloans.com.

Hard Money Loans – The Best Way To Finance Home Construction Projects!

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Category : Construction Loans , Hard Money Loans

If you are planning to build a new home but not sure how to finance it, hard money loans would be the perfect choice for you. It’s the best suited for availing finance in order to construction home or for remodeling an existing home. A hard money loan is typically a short-term loan secured by real estate. It comes with certain features that are distinct from the other regular loans. Here are top three significant advantages of obtaining a hard money loan:

1.Fast Approvals and Funding: The speed of the approval process and funding of the loan is often seen as one of the biggest advantages of hard money loans. In many cases, a loan can be approved on the same day as the initial request. A hard money lender can get your project funded in 10 days or less.

2.Easy To Qualify: A hard money loan is much easier to qualify rather than a tradition loan. It’s the best choice for those who can’t receive traditional loans. If you have been rejected by the banks for a conventional loan based on your credit score or other issues, you are still able to work with a hard money lender to get the money you need.

3.No Prepayment Penalties: It’s one more advantage of getting hard money loans that contribute to your success. Traditional banks often charge hefty prepayment penalties if circumstances change and a loan is fully or partially repaid before the due date, but there are no prepayment penalties with hard money loans.

What Is Hard Money Construction Loans?

Hard money construction loans are collateral-based loans and also its the best alternative to a bank loan or traditional mortgage when financing the construction of a building, or making improvements to an existing building. The collateral for a hard money construction loan is the value of the project after completion. Most of the real estate investors or borrowers find hard money construction loans more convenient because the restrictions are much easier in comparison to traditional loans.

Qualifying For A Hard Money Construction Loan

To qualify for a hard money construction loan, a qualified builder must be involved in your construction project. The private money lenders require detailed specifications of your construction plan. This includes all the details including floor plans and the materials that are going to be used in the home. Your home value must be estimated by an Appraiser in order to get a hard money construction loan. Typically, you need to put down 20-25% minimum for a hard money construction loan. This ensures that you are invested in the project and would not just walk away if things go wrong. This also protects the lender in case the house does not turn out to be worth as much as they expected.

Once you have qualified for and been approved for a hard money construction loan, the lender begins paying out the money they agreed to loan to you. However, they are not just going to give the builder the cash all at once. Instead, a schedule of draws is set up.

The Bottom Line:

A hard money loan is the best source of financing when banks are not an option or the loan is needed in a short period of time. If you’re having a tough time securing the traditional loan, you can go for a hard money loan to finance your home construction project quickly.

To find out whether you qualify for this type of funding or not, Contact Magna Capital Group, Inc. Today! We specialize in innovative real estate financing for borrowers who fall outside the box of traditional lending guidelines. Magna Capital Group offers private hard money loans for any type of residential and commercial project. We understand the complexity and details of construction projects and find proper financing to make your project successful. We are fast, creative and reliable consultants with the experience and lending sources to keep your project momentum moving forward.

For more details about our hard money construction loans program, Call Us at (310) 734 4044 or Email at info@magnaloans.com.

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    Although Magna Enterprises, LLC and Magna Capital Group, Inc. are referred to throughout the text of this website as Magna Group of companies, they are not affiliates, parent or subsidiary companies as both companies are separate and distinct entities. Any questions or issues regarding this disclaimer should be addressed in writing c/o Shawn Molem.

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