Why pull credit for asset based loan?
Why pull credit 25 times a year (# properties I do per year)?
Why does anyone need to pull credit if it is Hard Money, based on the property?
No, I do not want a lender to pre-qualify, pre-approve me. I want a loan, fast. Not some 30-45 process.
Besides, hard money is CHEAPER for me than conventional. Why, because I flip the property in 6 months or less. Take a standard GFE, with all the junk fees, and compare it to a HML. Even if they come out the same, it is much less hassle.
I had a friend, a foreigner, who just got financially raped by a broker. Paid $11K in pts, fees, junk fees, etc. to close on a $200K loan, and his interest is high, has a pre-pay, and is adjustable.
I recently had a conventional lender pull credit on a friend of mine that wanted to rape him as well. The GFE had 0-3 pts on the front end, 0-3 pts on the YSP, high interest rate (7.75 1st ADJUSTABLE with pre-pay) and 10.75 on the 2nd (ADJUSTABLE WITH PREPAY). This is with a 727 mid-score. The payments worked out to about $1000 / mo HIGHER than the current GFE from another lender.
The problem with the HMLs I have locally:
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Lender A is doing fewer loans to anyone, since he just buys his own properties now and flips them or fixes them and flips them. He feels that he can make a lot more doing that, and doesn’t want to do too many loans.
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Lender B is hard to get a hold of, and most of my deals are time sensitive. When I can reach him, when he is not out of town or out of the country, I am able to use him
I have been funded in 48 hours. A conventional lender cannot do that.
As far as my credit, NOT ONLY did a pull myself, but I AM working on a conventional loan for a different property, and my mid-score was HIGHER than the ones I purchased.
Instead of trying to get inside my head and ask me why this and why that, or instead of being negative and telling me that I will have a had time doing this or that, why can’t people just answer the question about doing loans?
I never said I would not provide my social or my credit report. I said I don’t want it PULLED.
I am looking for a lender who will look at the VALUE of a property, so I don’t have to go through a bunch of hassle each time, like answering a bunch of inane questions.
Why HMLs? Because there is no last minute hidden BS. Most lenders hide all sorts of fees in the loan, and jack up the interest rate at the last minute to increase the YSP. After 30-45 days of frustration getting the loan, most people sign at the closing table, get raped, because they have no other choice.
I would rather pay the pts and fees as agreed, close in a week, and be done without hassle.
I would never use a conventional loan for deals I am keeping 6 months or less. It would be too expensive.