Not all hard money is created equal, beware of those over promising and under delivering...
Important questions to ask:
- Are you talking directly to the investors (or their representative) or are you dealing with a broker that will co-app the deal with you at a higher than wholesale price?
LTV Capital, Inc. Represents direct investors and is compensated by the investors outside of the transaction.
- Are you dealing directly with private money or is this a correspondent line that requires investor approval and additional processing/underwriting times?
Side Note-you will also begin seeing these shops go away as the correspondent lines are frozen or eliminated, we have already begun to see this - LTV Capital, Inc. deals directly with private RE investors in California and does not rely on any lines of credit for funding.
- Is this a true Equity Based Hard money loan or will they require income doc, asset doc, min credit scores etc.?
LTV Capital, Inc. offer true Equity Based loans--- no consideration for credit, income, reserves etc. Equity is king!
- Do they say NOD/NTS ok?
Check the rate sheet, generally those situations are eliminated with an asterisk, LTV is drastically reduced or income doc/credit requirements kick in. We have no Asterisks, no hidden tricks - Foreclosure bailout is truly ok with sufficient equity.
- What is the Term/Prepayment Penalty? Is this is short term loan that will put the borrower in the same situation again shortly? Does this have a restrictive prepay that will not allow the borrowers to refinance into a better term loan when situation is resolved?
We write 10 year fixed rate notes with 90 day guranteed interest as a standard.
- What are the hits/adds to quoted pricing?
We keep seeing lower than market price quotes, then when reviewing the rate sheet we see 3-4% in hits making this ultimately a higher than market rate loan. We have no hits or adds, what we quote is the fee we will deliver, we don't even post a rate sheet to confuse/trick you, contact us and we will give you a quote that we will stand by.
- What is the max broker compensation?
Cal-32 restricts what you can make on owner-occupied deals and that is the same for ALL Lenders, beware of those quoting higher than compliant pricing. We will give you exactly what you can charge on restricted transactions upon submission so there are no surprises.
- Is this a high cost heloc?
If so, you're looking at higher rate/terms and prepay. additionally the lender (by law) cannot advance all the funds at closing and still call it an LOC. so watch out for a 70% LTV quote that turns into only 60% upon funding (often times leaving the borrower to have to bring in funds to close!) - We generally fund closed end Loans, so no bait and switch on funds at closing - if a heloc makes better sense, you will be quoted this on day one!
At the end of the day, the market dictates what can be charged and earned on deals (regardless of A paper, sub-prime or hard money), so if someone is quoting something that is too good to be true, it usually is, ask the above questions and you will be able to do an apples to apples comparison of products and terms.
We stand by our programs/terms and at the end of the day we will out quote any REAL deal, give us a call on that quote and we will show you how we are comparable.
We are fully funded and not going anywhere - we use private money and do not sell loans on the secondary market.