Need A Mortgage Broker

I have found that smaller local community banks work great for loaning you money based on equity in a home. Usually though, they want to give you a new loan that includes what you already owe and the money you want to borrow. And give you the cash back at closing so they are in a first position and not a second. Most won't loan and chance a second position in this market because if you walk away, they have to try to buy the first or their money is just gone. These loans are usually called "in-house" loans and can close in weeks. I have closed them within a few days of requesting it and getting them all the info. Melisa

Great information, thank you!
-Mike Hutchins

Hello everyone, I just signed on with this program, have read Dean's book and want to get started right away. Ran into problems. My credit is right under the margin. Have been to 2 mortgage brokers and am getting nowhere fast. I am trying to buy a house for $30.000 in Lancaster...Wow I really think I could do this,but keep running into a wall. I am desperate because this house will be rented to someone in dire need when I buy it. Their time is running out and I feel sick over it. They have tried everything else, I/We are their last hope. I really need a private investor or a broker that is not just in t for the money, someone that is willing to work with me to solve this problem. I am currently working full time and am going to be paying off all my debt as well as soon as I am given a monthly plan. Please help us. Thank you... Gypsyopal

Darrell,

You said you recently bought (just bought) your first property. First, congratulations that is great news! Unfortunately, because of the new Freddie & Fannie guidelines they will require that any equity in that property, that you want to access, be "seasoned" for at least 6 months before you can access it. Remember, Freddie & Fannie purchase about 68% of all mortgages in this country, and they are the largest underwriters by far.

A broker is an "intermediary" or third party and they do not have access to the wholesale lending market. They will only broker you a loan to some investor who will sell your loan into the secondary market. This means it will have to meet Freddie's & Fannie's guidelines. And I guarantee you, you will pay more for that loan.

Your best bet for this is to seek out and develop a good relationship with a portfolio lender. These lenders will not sell your loan off into the secondary market, and therefore do not have to follow Freddie's & Fannie's guidelines. They create their own guidelines. You can find these portfolio lenders typically in two places. First, as Melisa stated above, your small local community banks---the smaller the better. And second, local credit unions or like I use, larger credit unions that lend in a 4 or 5 state region.
Personally I would not do an equity loan. In your situation I would recommend a HELOC---or home equity line of credit. I just did one, in second position for $35K. The credit union is you best option, the rates are low---prime minus a percentage for owner-occupied, and prime + 1 for non-owner occupied.
Mine was 4.25%, prime + 1. I saw one for 2.99% for owner-occupied. These loans are great for investing because they are a vairable rate loan which adjust with the prime, and you don't get charged until you use them. It's basically a line of credit which you can keep using an reusing. Great for rehabbing and buying with cash---who do you know will loan you money at 4.25% to purchase a home cash without points and major closing cost. You are smart to use your equity this way, It will expand your profit base.

I know it can all sound daunting, but keep in mind as you go in search for these lenders, that these small banks make up 96% of all banks in America. Your chances are much greater with them than with those big boys who are just interested in stuffing their coffers full of money and not giving anything back to the community.

If you get an opportunity, I posted a "primer" on how to find these lenders. Go to the Real Estate Forums section and click on the Financing and Credit topic, page down until you find the post titled, Banks....smaller the better by Kingdom Property and you'll find my post there, or you can go to my account and access it there. I added two web sites where you can begin your search for your area. Like I said your best bet is a credit union. And portfolio lenders will not work with mortgage brokers.

Best regards on all your real estate endeavors,

southstar

Gypsyopal,

With your credit at the cutoff line you might have a difficult time getting a loan, and it sounds like you are---my heart goes out to you. It sounds like your objective is an altruistic one. My sister just went through a similar situation and I was able to hook her up with a broker that was CMPS qualified (certified mortgage planning specialist) the only brokers I ever use and would only recommend. He was a rabbit out-of-the hat fellow, in that he really performed some magic to get her financed. Her credit score was 1 point above the cut off line and he tried 4 investors until one said yes. With such a small loan amount that might work against you, but don't despair there might be other ways to get the property. If you are in fear of losing the property, are you in a position to get it under contract, meaning do you have a small earnest deposit? If so lock it up with the purchase being contigent on you getting financed. You can legally do that---have your realtor do it.

Once you've tied it up, or before, go to the CMPS site, www.cmpsinstitute.org and research 3 of their brokers near you. I just checked the site and there are 67 pages of listings in CA---you should be able to find 3 close to you. You can punch in your info in the search box on the left of the page and get started. Look at their qualifications listed there and then visit their individual sites to see more. Call them and explain your situation, lay it all out on the table they can best help you that way---these guys I find are very honest. If they are not able to help you try a small credit union, see my post above, and go to this site to research credit unions in your area, www.creditunionaccess.com you can research by city. You're in luck, California has 601 CU's and Antelope Valley FCU is in Lancaster---and they do first mortgages. Since the property is in Lancaster I would try them first. Credit unions are very community oriented. There are also a few in Ontario. So you have some options.

If that dosen't help you, and you have a small down payment then try to see if the seller will offer some assistance with seller financing. Offer them a good interest rate on their note. If the seller is not willing to finance it then try lease optioning it using whatever you have for the down. In this case the larger the down the better. Then you can rent the property to your friends. Later, when your credit improves get financed and make your purchase. I think this might be your best bet as long as the seller will agree to it.

I'm very familiar with the lease option strategy so if you want to pursue that route send me a PM and I will help you with it, OK! If I can help you any further please let me know. I hope this helps you out, and YES you can do it. As Indy-Joe always says, " Believe and Achieve. "

Best regards,

southstar

Well it sounds like this may be my best approached but will it be possible to get a "HELOC" with a "FIXED RATE"?. I thought the only way to get a heloc was if you were living in the home, which i want be. I am already a member in the credit union and have a checking and savings account i have had it for 2 years now. Thanks for all advice

Darrell

Yes you can get a HELOC with a fixed rate it's called an Equity Loan. It's one lump sum payment that you will pay back in fixed monthly installments with a fixed maturity date. If you don't like suprises this is for you. Just remember you will pay more for this loan, and you will get charged on the entire amount whether you use it or not.

The HELOC is revolving debt with the limit approved. You can borrow some or all of it, AND YOU ONLY GET CHARGED ON WHAT YOU BORROW! Say you get approved for $35K, as in my case, and you use $5K for a minor rehab you will only pay interest on that $5K. But if it was an Equity loan you will get charged on the entire amount. Once you repay the HELOC (if you use it all or any portion) you can borrow the money again. With the Equity loan you would have to go through the entire loan process again. The monthly payments on the HELOC can be very low, and in my case I'm only required to pay the interest. The rate is tied to the prime rate (3.25%) and will move with the periodical change of the prime. I don't think the prime will move anytime soon. If it did it would only be .25% or so. Go to www.mortgage-x.com and track the most recent history of the prime rate, and read about what the experts think about the future of the prime. I don't know where you can find money this cheap!

You can get a HELOC on a non-owner occupied, and your credit union is probably the best place. If you're living in the house it shouldn't be a problem. If your credit union dosen't do 2nd's then use that web site I gave you and find one in your area that does.

Best wishes Darrell, I think you should do just fine.

southstar

There are 2 things you can do. First thing is go to the credit union you have a relationship with. Don't go to anyone, but walk straight to the manager of CS and speak to him. Explain to him what you want to do and point out that you have been a loyal customer for 2 years and that you love them so much that you want to do more business with them. Playing to the ehgo always works, trust me. Usually, smaller bank/credit union will work with you somehow. They will give you some options.

OPTION 2. Wells Fargo. They have great programs right now as far as refinancing goes. Instead of taking the equity out, consider refinancing with cashing out option. Wells Fargo can even still do no doc loans (of course at a higher rate).

Hope this helps.

Yuri

Great information. I learned alot reading your last few posts. You are obviously quite knowledgeable, thanks for sharing with the rest of us. Much appreciated!
-Mike Hutchins

Darrell,

You want to leverage that equity. It's this simple---if you let that equity sit there and not use it, you will simply lose the velocity of your money! Any good accountant will tell you that. Just ask yourself these 2 questions, 1. How safe is my equity? And, 2. How much interest is my equity netting me monthly?

If you could borrow that money at 3.25% (in your case since it would be an owner-occupied loan) and get a return at 18-32% why wouldn't you. It's a no brain-er!

southstar

I went to my local credit union and asked about a loan for my first property 20K. By the time I left they wanted 25% down plus closing costs and points. I asked about a home equity loan on the property and was told since it was not my primary residence it did not qualify.

I used hard money to buy the duplex 16% and kept looking for other options.

I found a bank that started a new program that allows for 80% of the TAXED value of the house. The loan is a 10 year adjustable prime +1 4.25%. As the loan is paid down I have more credit to use.

As stated earlier I don't see prime going anywhere anytime soon.

Hope this helps some one.

Jailor378,

Good job! That is exactly the same product I got, as I mentioned above, prime + 1. The only difference I got mine from my credit union and there is no payoff time frame. It is strictly revolving. Velocitize that money. I hope you have an opportunity to do some cash purchases in your area. This way you can repeate the process all over again. Make your money work in your favor.

I'm glad to know others are being successful at this. And Jailor you're right the prime isn't going anywhere, go to www.mortgage-x.com and track the prime's history.

Best regards,

Southstar

Hello,

I want to thank you for your great advice everyone especially south star
I will be going in to my local credit union in September to ask for a HELOC loan. But which heloc loan do i need to ask? is it called a prime loan? because after hearing your situation i would like to apply for the same kind of loan i don't want a fixed loan i only want to be charged for what i use.

Thanks,
Darrell

Darrell,

We are all glad to help, and I for one appreciate your thanks. I hope things work out for you. If for some reason your credit union rejects your request try others along with small community banks. Go to these 2 web sites to search, www.creditunionaccess.com and www.icba.org both will allow you to search by city and state. I just spoke with that bank in Cleveland, OH again today and they are still offering a HELOC on owner occupied at an astounding rate of 2.99% with absolutely no closing cost. Unfortunate for me they don't lend in Colorado, but I believe they said they lend in 6 other states.

When you go to your CU just ask for a home equity line of credit with a variable rate. It is exactly as it says a line of credit. If you already have a good relationship with them, and you have sufficient equity in your property as well as planning on living in the property you should not have a problem and you should get the best rate. I don't know if your credit score will come into play. It might be wise to check rates at other banks and CU's in your area before going in, just to make sure you're getting the best rate. I would be surprised if you got a rate higher than 3.25% It sounds like you're a good candidate.

By the way, banks and CU's have different names for their products just make sure you are getting a home equity line of credit.

Best regards,

southstar