CREDIT CONSCIOUS, NOT CREDIT QUALIFYING Private money loans are secured by real estate . So contrary to what some may believe, a private money lender’s main concern isn’t usually the borrower’s credit, but rather the concern typically lies with the property’s value. Not to be misconstrued: credit is still important, but it’s not weighted as much in this case as people think. Situations that would ordinarily be deal-breakers when applying for a conventional loan are often hurdles in the rearview mirror when applying for a private money loan. For example, income requirements are different, credit requirements (as mentioned) are different, and implications of short sales or foreclosures are different. Simply put, because these loans are secured by real estate, many investors who are unable to obtain conventional financing can still get a private money loan if the subject property (property being used as collateral) has enough equity. QUICKER CLOSING TIMES Let’s be real. Unless you scored a stellar off-market listing (and even if you did!), you need more financing tools at your disposal than conventional or government loans — especially in a hot market where speed-to-close rules. Private money loans are funded much faster than conventional loans... in some cases as quickly as 7-10 days. Conventional financing typically takes 30 to 45 days, whereas for a private money loan, the application process is fast and sometimes the loan can be approved on the very same day. This makes private money loans a great source of financing when investors want the loan in a timely manner. Obtaining funding at a fast rate is essential for a lot of investors, especially when trying to purchase a property with several competing bids… there is often no time to wait for approval on conventional bank financing. LESS DOCUMENTATION Fact: Private lenders do not have the same regulatory requirements and constraints as compared to conventional lenders. While the interest rate of such short-term bridge loans or longer-term rental loans will be higher compared to conventional loans, private lenders such as CIVIC Financial Services lend on stated income and stated assets. What exactly does this mean for you? It means you forego the traditional W-2, proof of income and employment requirements. If you’re new to an industry or are self-employed — it’s not a problem. While the income/assets verification is just one of the easier aspects of the process, for investors who have an unorthodox income this is a major plus.
USING LEVERAGE TO YOUR ADVANTAGE An important advantage for investors who choose to go with a private money lender is the ability to access cash without tying up assets. This means they can leverage their capital and better maximize their profits in several ways. • Rental Loans: Rental loan programs are perfect for investors who want to benefit from the perks of private money lending while also receiving a longer-term loan. • Refinance, Reconsidered: Cash-out options with a private lender give you the power of cash to go acquire other properties. • DTI and Credit: The traditional debt-to-income (DTI) ratio is not a qualifying factor with private money loans. Also, a loan with CIVIC, for example, does not appear on your credit report — so you do not have to worry about the effect on your credit score or DTI. • Portfolio Makeover: Have your properties accrued some healthy equity? A cross-collateralization is a great opportunity to recapitalize and continue to grow your real estate wealth. Private lenders such as CIVIC can cross up to 10 properties under one single loan (with no limit of loans) and offer up to 80% cash-out. Experienced investors are taking advantage of today’s low rental rates to refinance their entire portfolios. BREAKING THE MOLD Private money lending is not what it used to be. Stigmas from the past are no longer, and today, institutional private lending is no longer an unusual funding source. Reputable private lenders such as CIVIC are bridging the gap between conventional and traditional hard money lenders — serving as institutional private money lenders offering affordable access to capital. So while it may not be the customary choice, specialty services never are.
CIVIC Financial Services, LLC is a leading institutional private money lender specializing in financing non-owner-occupied investment properties. CIVIC helps investors leverage opportunities to grow their real estate portfolios and build wealth through real estate. For more information, please visit www.civicfs.com. ©2021 CIVIC Financial Services, LLC. All Rights Reserved. This is not a commitment to lend. All offers of credit are subject to approval. Restrictions may apply. CIVIC Financial Services, LLC reserves the right to amend rates and guidelines. NMLS ID 1099109. Loans made or arranged pursuant to a California Finance Lenders Law License 603L321. AZ Mortgage Broker License 0928633. OR Mortgage Lending License ML-5282. See www.civicfs.com/Licensing.
Made with FlippingBook Online newsletter