5 Questions Realtors Ask About Private Money Loans

5 Common QuestionsReal Estate Agents

Ask About

Private Money LoansHow to Help Your Buyers and Sellers Find Short-Term Financing to Close More Escrows

Courtesy of PrivateMoneyBlog.com

Question #1

What’s the minimum down payment?

PrivateMoneyBlog.com

Answer:For most purchase transactions, your buyer will need a 35% down payment or more.



However…



However…

In some cases, the loan amount and loan-to-value (LTV) might be based on the actual appraisal value if it is actually higher than the contract price.



However…

In some cases, the loan amount and loan-to-value (LTV) might be based on the actual appraisal value if it is actually higher than the contract price.

(This might help make your deal possible.)


Question #2

How fast can you close?


Answer:For most purchase transactions, the closing time-frame can take from 1-3 weeks.



Of course, you understand the nature of real estate deals.

So the actual timing depends on how quickly you and your clients can provide all the necessary items.



Of course, you understand the nature of real estate deals.

So the actual timing depends on how quickly you and your clients can provide all the necessary items.

Such As…


Answer:• Loan Application (The buyer can apply online.)


Answer:• Loan Application (The buyer can apply online.)• Fully-executed purchase contract


Answer:• Loan Application (The buyer can apply online.)• Fully-executed purchase contract• Preliminary Title Report


Answer:• Loan Application (The buyer can apply online.)• Fully-executed purchase contract• Preliminary Title Report• Appraisal


Answer:• Loan Application (The buyer can apply online.)• Fully-executed purchase contract• Preliminary Title Report• Appraisal• Other transaction-specific items as may be

needed by title & escrow, etc.


Question #3

Do you need inspection reports?


Answer:You will not need to provide home inspections for most purchase transactions.



However…



However…

If inspections and reports are part of the purchase agreement, the lender may request a copy of those reports in underwriting the loan.



However…

If inspections and reports are part of the purchase agreement, the lender may request a copy of those reports in underwriting the loan.

Tip: The buyer should do their due-diligence

on all real estate transactions.


Question #4

Do you need an appraisal?


Answer:Yes.

Your client will need to have an appraisal done for most purchase transactions.

About 80% of the purchase loans will need a recent appraisal to support the market value and show the general condition of the property.


Answer:Yes.

Your client will need to have an appraisal done for most purchase transactions.

About 80% of the purchase loans will need a recent appraisal to support the market value and show the general condition of the property.

(The collateral property is very important

for a private money loan approval.)


Question #5

What do you need from my client to get a

pre-approval?


Answer:Your Buyer will only need to provide some basic items to get the process started.


Answer:Your Buyer will only need to provide some basic items to get the process started.

Here’s a quick list…


Answer:• Standard mortgage loan application (The

borrower can apply online 24/7.)



borrower can apply online 24/7.)• Paycheck stubs or other form of documentation to

support the income listed on the application.




support the income listed on the application.• A current bank statement or online printout

showing the buyer’s available down payment.





showing the buyer’s available down payment.• A brief summary letter explaining how long they

plan to keep this loan and how they intend to pay the loan in full. (Exit strategy)





showing the buyer’s available down payment.• A brief summary letter explaining how long they

plan to keep this loan and how they intend to pay the loan in full. (Exit strategy)

And that’s it to get started. We’ll review

the info and get to work for you!


If you found this information helpful,

please share it with a fellow Realtor.

(We would really appreciate it. )

If you found this information helpful,

please share it with a fellow Realtor.

(We would really appreciate it. )

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Content Courtesy of ARC Capital

www.arcequity.com

Licensing and legal stuff:

This slideshow presentation is only for informational purposes as it relates to California real estate.

We do not render any legal or tax advice; therefore, consumers are encouraged to seek a qualified professional for such legal or tax matters.

This presentation does not constitute a commitment to make or arrange a loan at any given interest rate.

All loan requests are subject to underwriting and final investor approval.

Presentation created by Christopher Sanchez, Associate Broker

Licensed by the California Bureau of Real Estate #01361564 | NMLS ID #278113

ARC Capital | 100 Stony Point Road, Suite #260 | Santa Rosa, CA 95401

Copyright © 2014. All rights reserved. (707) 523-2900 | www.arcequity.com

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