Can someone give me advice on dealing with an HML for the very 1st time? Do they frown upon 1st timers? Do I draw out a plan for a specific property and submit it that way? Or do I just call to “pre-qualify”? Do they care about requirements?
Some HMLs do not prefer to work with first time investors. You should be able to call or email to get pre-qualified. If you are buying at 70% of ARV and the min ARV is $85k you are pre-qual’ed.
Lencers are lenders. If you meet their requirements, they will work with you. Why do you want a HML? Is this your primary residence or investment property? What will be your equity participation? How’s your credit? There are just too many factors that go into getting a loan. Being a 1st timer is the least. Want details about a specific scenario, let’s talk.
DHLC (and any others).
I see 70% ARV used all the time here and understand what it means. I am curious though if it is actually limited to ARV. IOW, suppose I find a deal that needs no repairs. What about if I’m paying much less than FMV to begin with. Is this treated the same as ARV?
With houses needing repairs the loan is limited to 70% of ARV. If the house does not need repairs than the loan would be limited to 70% of the “as is” value. Remember that the market discounts houses needing rehab MORE than the actual cost to repair the house.
OK, so I think what I’m hearing is that it is same-same. If I get a 250k home at 175k then the lender would loan 70% of FMV (which is really the same as ARV). The fact that the repairs estimate is 0 is really immaterial. If repairs needed cost 40k, then I get to keep FMV less Loan bal & costs less repairs. If repairs is 0, it’s 0 and I get to keep more (FMV-Loan bal and costs). Anything more than 175k, I have to come up with somewhere else, credit card. loc, savings, beg borrow steal, etc.