Hello,
A colleague of mine suggested avoiding typical loan processes by buying via 90 day note (which he’d then refi to pay off). I’m new at this game (obviously) but I don’t understand the mechanics… can someone explain?
ive been told the same thing for when i flip houses. I am told to get a 6 month note, fix it up then try selling it before that 6 months is up. After that, refinance it if it hasnt sold. Problem is, whenever i call any banks, they have no idea what im talking about…so they say… i too would like some info on this…
They may be talking about a HML, you can get a HML for up to a year, but rather than keeping it that long sell it off as soon as possible.
I forgot…the biggest problem with HML is the HIGH interest rates…typically between 16-18%, Essentially the longest you want to be with that loan is 90 days…at that point it either needs to be sold or refi’d
are you putting 20% down when buying? If so you can go through a broker that has a correspondent lending license and go through one of teh Fannie Mae lenders. Citi has a 6 month arm and also a 12 month.
I have always wanted to know what a HML is. Also, for an HML, is 20% down required?
HML= Hard Money Lender, and no they do not usually require money down…only if you have really really bad credit
A hard money Loan uses the real estate as collateral,
NO YOU DO NOT HAVE TO PUT 20% DOWN AND YOU DO HAVE TO HAVE 35-20% EQUITY IN THE DEAL FOR A HML TO LOOK AT YOUR DEAL.
SOME HARD MONEY LENDERS DO REQUIRE YOU TO HAVE SOME MONETARY INTEREST IN THE PROPERTY AND THERE ARE SOME THAT WILL DO A 100% DEAL AT A 65%LTV SO YOU JUST HAVE TO LOOK TO FIND WHAT YOU NEED WITH THE HOUSE