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Owner-Occupied Hard Money Loan Alternatives - YouTube

Channel: Private Lender Link

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are you seeking a hard money loan

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secured by a primary residence and

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finding that no lender will consider it

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in this video i'll provide two

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alternatives to owner-occupied hard

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money loans

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the typical terms and how to find

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lenders that provide alternative lending

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solutions to homeowners

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i'm rocky bhitani ceo of

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privatelenderlink.com where investors

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and brokers can easily find direct

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private hard money lending companies if

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you're in the investment real estate

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business and want to gain insights into

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private mortgage lending subscribe to

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our channel and get notified every time

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we release a new video

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purchasing a home that you plan to live

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refinancing the mortgage on your primary

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residence or getting an equity cash out

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loan for personal expenses are all

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considered to be consumer mortgages

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due to strict government regulations and

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compliance requirements for consumer

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mortgages

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private and hard money lenders do not

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offer loans for owner-occupied homes or

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second homes

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there are a few exceptions in california

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and a few other western states which

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i'll cover in a separate video

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for this video i'm going to provide two

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alternatives to homeowners in most

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states throughout the country

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the first alternative is called non-qm

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also known as non-prime

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qm stands for qualified mortgage so

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non-qm loans are those which fall just

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outside the standards of a traditional

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qualified mortgage

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this includes loans for borrowers with

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low credit scores self-employment

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seasonal income and other unique

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situations

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one of the main qualifications for

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non-qm loans is showing the ability to

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pay so you qualify based on income and

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your debt to income ratio for income

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verification some programs only require

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recent bank statements instead of tax

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returns if you are purchasing a home

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with non-qm financing you'll need to

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have a cash down payment of at least 20

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of the purchase price

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also as you probably guessed non-qm

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loans have a higher interest rate and

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fees than traditional mortgages however

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they are not as high as private or hard

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money loans

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you can find a few non-qm lenders on our

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website select residential owner

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occupied from the loan type list

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then select a state or major metro area

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the second alternative to private

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lending for owner-occupied homes is

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equity sharing this is only for cashing

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out equity on a home with amounts

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ranging from 30 000

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five hundred thousand dollars it's not

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for purchasing a home although you can

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cash out equity on your existing home to

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buy another property

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the way it works is the lender will

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provide you with a cash out funds in

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exchange for a percentage of the home's

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appreciation

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over a 10-year term or a 30-year term so

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when the loan is paid off the lender

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will receive the principal loan amount

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plus a percentage of the increased value

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over the contract term

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one of the main benefits to the equity

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sharing program

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is you don't have to make any monthly

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payments the lender will put a second

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lien or a third lien on the house but

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it's not a mortgage you don't pay any

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interest but you will have to pay an

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origination fee typically two to four

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percent of the loan amount

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the main qualification is sufficient

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equity and the property location but you

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also need to have decent credit

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the maximum combined loan to value is

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typically 80

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these equity sharing loans are not

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available in all 50 states at the time

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of this recording in late 2021 we found

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it's available in 19 states

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we have a few of these equity sharing

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lenders on our website but since these

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loans are not mortgages you won't find

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them in the lender searches instead

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click services in the main menu to

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access our service provider directory

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then click investor services from the

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filters submenu select home equity

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sharing

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click on each company's profile to learn

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about their programs then click the

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green contact button to find their phone

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number and a form to send an email

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please remind each company that you

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found them on privatelenderlink.com

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if you found the content in this video

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to be useful please click the like

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button and be sure to check out our

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