Non-institutional Lending (aka Hard Money)

One of the options that homebuyers and investors have for financing a home is a non-institutional loan, also known as hard money.   Here is an comparison between a typical loan vs. a non-institutional loan.

Example:  $150,000 Home Purchase

                                             Conventional Loan                           Non-Institutional Loan

Down Payment %                           5% -20%                                            30%-35%
Down Payment  $                     $7,500 - $30,000                              $45,000 - %52,500    

Closing Costs/Impounds %                4%                                                      5%
Closing Costs/Impounds $              $6,000                                                $7,500

Principal / Interest                      YES                                                    Interest Only
Rate                                           3.75% - 4.5%                                              10%

Payment Example

Down Payment + Closing costs      $36,000                                       $57,500  

Payment                                        $555.75/month                              $833.33/month

Plus Taxes & Insurance estimated   $170.00                                      $170.00

Total                                                 $725.75                                     $1,003.33


Interest rates and fees are for illustrative purposes and are subject to change and are on approved credit.  Clients that wish to invest using non-isntitutional loans must read and understand the terms of the loan, especially the renewability of the loan and the term.  Non-institutional loans should be used for a short term and paid off or replaced with a traditional loan as soon as the borrower qualifies. 

Non-institutional loans must comply with Local, State and Federal laws.  These loans vary greatly in terms, rates and fees.  These are given as illustrative examples only.  For specific information about non-institutional loans, feel free to contact Brent Wood at 702-629-9555 or bwood@allwestern.com

Brent A. Wood

All Western Mortgage

Cel. 702-629-9555

 

Branch Office

770 Coronado Center Drive #160 Henderson, NV 89052

 

Corporate Office

8345 W Sunset Road 2nd Floor Las Vegas, NV 89113 

 

Fax 702-948-5196

 

Please visit my blog: www.mortgagefinancenews.blogspot.com 

Nationally Registered Mortgage Agent, B.S.B.M.  NMLS ID 327581

Refinance FHA Loans TODAY !!!!

There is big news in the Mortgage world for FHA clients. 

The Federal Housing Authority has changed Mortgage Insurance Guidelines and they go into effect on June 1st, 2013.  This change makes Mortgage Insurance PERMANENT.  No longer can you eliminate Mortgage Insurance by paying down you mortgage or having appreciation enough to bring your loan below 80% of value. 

Mortgage Insurance on FHA loans is typically $100-$300 per month.  Before this change, clients could expect to pay that for 5 years or so.  The total cost would typically be $6,000 -$20,000.  Now, with it becoming permanent, the lifetime of mortgage insurance could cost $20,000 -$100,000.  Of course, a client can always refinance out of an FHA loan, but there is no guarantee what their rate will be in five years or more. 

Solutions: 

1) Refinance your FHA loan now at historically low rates before June. Value / Equity are not an issue with FHA streamline refinances.

2) If you have a little equity (3-5%) you can refinance into a conventional product without monthly mortgage insurance. 

If you have questions about your options, contact me by phone or email.

Brent Wood
702-629-9555
bwood@allwestern.com