Owner Occupied Hard Money Loans in California
California Hard Money Direct is one of a handful of hard money lenders offering owner occupied hard money loans. We are a private money lender willing and capable of providing residential hard money loans even when the borrower intends to use the property as their primary residence.
The regulations one must follow to structure owner occupied hard money loans is very specific. Not something to be taken lightly. Hard money consumer loans require tremendous expertise. With California Hard Money Direct, you can rest assured we have the knowledge and years of experience needed to structure your loan properly. You can rely on us to close your owner occupied residential hard money loans.
Hard Money Loans for Owner Occupied Homes
Let us start with a big one! FICO score. If the bank rules say your FICO score must be 640, it better not be 638. Banks will not be interested in providing you a loan for any one of the following reasons. If you are self-employed, at your job less than two years, have a recent bankruptcy, short sale, forbearance, loan modification or recent foreclosure. Traditional lenders will not consider you. If you are a foreign national living in the United States for years and years, it does not matter how long you’ve been in the United States.
You might think you have all it takes to be approved for a traditional loan. Once you provide all your documents you may get a conditional approval. Pay very close attention to the word “conditional” The conventional lender is telling you conditions apply. Now is when you must gather even more documents. It could be a few months down the line you find out your loan has been denied. In a competitive real estate market, most often there are backup offers waiting in the wings. Once your conventional lender turns you down, the seller has every right to go with their back up.
If you have at least five days left before your purchase contract expires, a Hard Money Lender can step in and get your primary residential loan funded. Many borrowers do not even want to take a chance with a traditional lender because they know it is a roll of the dice. Why risk losing the property when you can get your primary residential loan funded quickly with a hard money lender.
The solution is simple. Find a hard money lender that still offers residential owner-occupied loans. It is a known fact that Private money lenders can close without the same headaches as a traditional lender. And with a significantly faster turnaround time. Once the property is recorded in your name, you can refinance out of the Hard Money Mortgage directly into lower interest rate longer term mortgage. You can do so, as quickly as you like because we have NO prepayment penalties on owner-occupied loans.
Hard Money Loan For a Primary Residence
California Hard Money Direct is one of just a handful of lenders willing and able to provide hard money loan for Hard Money consumer loans. Most lenders are not interested in offering loans if the borrower plans on occupying the property. There are several reasons.
The main issues are:
- It is a riskier loan for the lender
- A three day right of rescission is required which drags the loan funding time out
- The lender must gather proof of income and carefully analyze debt to income ratios
- Substantially more paperwork is required
- The lender must have additional regulatory licensing
California Hard Money Direct is one of a small number of lenders offering residential business purpose owner occupied hard money loans. Here are some sample scenarios of a business purpose hard money loan:
- You occupy a home with substantial equity. You have a low interest rate 1st mortgage. You own a business in need of inventory, upgrades to equipment, want to expand, want to open additional locations etc. You can request a 2nd mortgage to acquire the funds.
- You want to purchase investment real estate.
- You want to invest in stocks, gold, bonds etc.
- You want to buy a vacation rental you might use occasionally but mostly rent on AirBnB
- You want to upgrade any number of other investment properties you own
As you can see, the list goes on and on. There are too many business purpose scenarios to list them all. If it is a business purpose owner occupied loan, no income verification is required.
Simply said, they come with too many mandatory rules and regulations per Government guidelines. They are much harder for borrowers to qualify for. There are fewer and fewer hard money lenders willing to provide consumer purpose owner occupied loans.
If you request a loan on your primary residence and plan on using the proceeds to remodel your home, spend it on anything personal, household or family use the loan will be denied.
If you want to borrow against your primary residence to purchase another home to eventually move into, this is still a consumer purpose loan. If you want to pay off credit card debt you will need to prove it is business debt and not your personal credit card debt. As you can see, it can become very difficult to be granted a loan on your primary residence. This is in stark contrast to many of the business purpose examples shown in the section above.
Owner Occupied Hard Money Loans in California
At California Hard Money Direct, we can help you purchase a primary residential home almost anywhere in California, with fast pre-approvals and impressively low rates.
Owner Occupied Hard Money Loans Are Granted, But You Must Qualify
Obtaining a loan to purchase a primary residence is not out of the question. It is, however, a lot more difficult to meet all the criteria. The first step is proving you make enough money to afford the loan. A lot of borrowers write off so much on their taxes that they cannot prove they can handle the new mortgage payment. Not only must you provide two years income verification, you must also show your debt versus income (DTI) is between 43% and 50%. This is calculated by looking at the borrower’s existing debts including car payments, credit card payments and other mortgages, as well as the new proposed mortgage plus taxes and insurance.
Prior to July 21, 2010 none of the requirements stated above were required. Consumer hard money loans were just as easy as hard money loans for investment properties. It was the passage of Dodd Frank regulations that now require the lender to verify income, debts via W-2s, tax returns, pay stubs or bank statements.
Owner Occupied Loans from Residential Hard Money Lenders
Our owner-occupied loans are typically written for 30 years although you can get out of them at any time. There are no prepayment penalties. Even though we are writing a long-term loan, we do not expect borrowers to keep the loan for any longer than necessary. We urge our borrowers to think of us as nothing more than a short-term fix. In other words, get the property under contract, fix whatever issue or issues that prevented you from getting a conventional loan to begin with.
The most common issues needing repair would be:
- Credit scores too low
- Too many write-offs. As such, not enough net income
- Prior short sales in the too recent past
- Foreclosures in the not-too-distant past
- Bankruptcy within the last two years
When you take the leap into a hard money residential loan it is important you start planning immediately so you have an exit strategy. Oftentimes the private lender will ask you at the time they take your loan application what your plan is to successfully get long-term financing. You should have already given this question a lot of thought so you can provide an answer that makes sense to the lender.
Certain issues such as credit score can be repaired quickly. However other issues such as prior foreclosures and discharged bankruptcies will require a mandatory waiting period by Fannie Mae of two years.
Many private lenders will not write the loan for longer than three or four years. This puts a lot of pressure on the borrower to correct negative issues or face a balloon date without an exit solution in place. We have eliminated this problem by offering 30-year consumer residential hard money loans.
Owner Occupied 2nd Mortgages Are Also a Good Option & Offer a Lower, Blended Rate
If a borrower is seeking a cash out refinance of their primary residence our first question will be, what is your current interest rate? If the interest rate is low and they have substantial equity we will recommend they do not touch their existing 1st mortgage. We will offer a 2nd mortgage instead. Interest rates on a 2nd mortgage range from 9.75% to 10.5%.
Let us say the borrower has a first mortgage of $300,000 at 3%. The borrower is seeking $150,000 cash. It would be significantly more advantageous for the borrower to continue paying 3% on $300,000 and 9.75% on $150,000 rather than getting a brand-new $450,000 1st mortgage at 9%. This is what we mean when we describe a “blended rate” This can only be possible if there is substantial equity in the property. We cannot go above 65% combined total loan-to-value.
If you are thinking 9.75% sounds like a high rate, it may not be, depending on what you’re using the money for. If you have credit card debt or other types of high interest rate debt you might be paying off 16% interest with 9.75% interest. Any way you slice it you are still better off at 9.75%. These are decisions that should be carefully evaluated.
Private Money Lenders for Residential Owner-Occupied Property
California Hard Money Direct is a private money lender for residential owner-occupied property loans in California. Borrowers seeking a loan must have between 30%-35% and be able prove income via tax returns, pay stubs or bank statements. Once income has been proven the borrower debt to income ratios must not exceed 43%-50%. The debt to income ratio will be calculated including the new proposed hard money loan.
|Owner Occupied & Residential Program
TIME TO FUND LOAN
Average 3 weeks
$200,000 - $5 Million+
Up to 30 year
1sts & 2nds
LOAN TO VALUE (LTV)
1sts - Up to 65% of combined total loan to value -- 2nds - Up to 65% CLTV
LOAN APPLICATION APPROVAL TIMELINE
Same day pre-approval
One to four unit
No prepayment penalty for Owner Occupied
INTEREST RATES & POINTS
Provide your specific scenario for current rates & points.
Why More Borrowers Choose California Hard Money Direct for Owner Occupied Hard Money Loans?
Work with a lender that has the knowledge, resources, and experience to get your deals closed quickly. Cut out the middleman and partner with a Direct Hard Money Lender.
Same day pre-approvals. Most owner occupied loans can be closed in about 3 weeks. Our interest rates and fees for hard money residential loans are among the lowest in the industry. Call now and compare for yourself.
We don’t need to toot our own horn when it comes to satisfied customers. Read our Google reviews from brokers, realtors and borrowers and you will quickly learn why California Hard Money Direct has so many clients repeatedly using our services for all their hard money needs. Call today and speak directly with a loan officer. We will listen carefully to your scenario. Once we know the details, we will let you know right away exactly how we can assist you.
Recently Funded Owner Occupied Hard Money Loans in California
Read what other borrowers have to say about working with our California owner occupied hard money lenders
I sincerely enjoy the high level of commitment and passion Judy brings to the table during the loan process. From the first day we spoke on the phone through the day the loan was financed, Judy was with me. She responded to any questions I had thoroughly and promptly. If need arises, I would use Judy again. Also, I would highly recommend Judy to anyone that seriously needs funding for investments and flips.
Judy is the type of person who follows through and moves FAST. She was also very sweet and a pleasure to work with. I would recommend California Hard Money Direct for anyone in need a quick loan to finish a project. They were a great resource for me.
Thank you Judy for all of your help. Judy is an amazing broker, she is very helpful throughout the process. She is quick and is very Organized. Judy knows her stuff…. and will not drag you along the process… Its either she can do it or not. … I will continue to come back, Thank you Judy.