Bridging the Gap
Below is a MRR and PLR article in category Finance -> subcategory Other.
Bridging the Gap
Summary:
Private money offers significant advantages, primarily through its flexibility, allowing for creative solutions even when the loan-to-value (LTV) appears high.Keywords:
Bridge Loans, private money, hard money, loans, mortgages, construction, lendingArticle Body:
At California Private Money Loan, we leverage the true value of a property, not just its purchase price, often benefiting investors who buy below market value. When rehabilitation or construction is part of the project, we base LTV on the property's projected value. Additionally, we support seller carry-back in a second position when it advantages the buyer. Our loans can reach up to 75% LTV, but under specific circumstances, combined LTV (CLTV) can exceed 125%.
To cover shortfalls, borrowers can pledge other real estate assets as additional collateral. We also employ an effective strategy to bridge gaps when LTV ratios seem too high. My father always said that a loan's viability often hinges on our fees.
However, we have resolved never to let fees block a good loan. Following the principle that a dollar tomorrow is better than none today, we offer to carry some or all of our fee as a small second. This ensures that quality loans meet our LTV criteria without unnecessary obstacles.
Our fees typically comprise 4% of the gross loan amount. When brokers are involved, they charge 1-5%, resulting in combined fees between 5-10%. While private money isn't cheap, it is notably fast and flexible. With broker collaboration, we can stretch a 75% LTV up to 85%. This flexibility often determines whether we can proceed with a loan.
?" Jeff Chaney, VP
California Private Money Loan
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