Is my HML on point?

Question

With 14%, 4-6 points? I have good credit (over 700) good income, 60k liquid and the deals I'm looking at are under 200k. This is the best rate I've found with an HML in my area. I can go traditional with a halfway in shape property but my understanding is that if it's not inhabitable, I need an HML. Right?

Jim Gordon · Answer

If the property is going be owner occupied you can get a FHA loan but on a NOO about the only way to go is a HML if the LTV is right.

Ryan Webber · Answer

HML's fees/interest usually add up to 18% (standard usury limit).  They normally don't care so much about your credit, so good credit doesn't mean much.

I would recommend that if you have 60K liquid with good credit that you approach a banker in your local area about a commercial type loan.  Usually the interest rate is prime or prime plus 1 or 2 (8.25-10.25%) on a short term call (1 year or so), and depending on the bank, down payment is very negotiable if there is considerable equity in the property.  I would recommend going to a smaller local bank and talking with the president or senior vice president about what you are wanting to do.

N/A N/A · Answer

I have a lender that will loan for ReHabs at these rates -

Current Rates 
  
Commercial Loans - Investors - Non-Owner Occupied 
  
Beacon Score
Greater than 680
up to 75% LTV
of ARV  1 - 3 Points
From 10.99% interest

Beacon Score
620-679
up to 70% LTV
of ARV  2 - 5 Points
From 11.99% interest

Beacon Score
Less than 620
Max LTV 65%
of ARV  Negotiated on a Deal by Deal basis

*****

However, the property must be located within an hour or so of these metropolitan locations.

Atlanta-Tampa-Birmingham-Chicago-Charlotte-Philadelphia

*****

Up to 100% of the entire purchase price, construction cost, closing costs and fees. ***

Paul Khin
Licensed Mortgage Broker
Small Commercial Lending
pkhin@josephscott.com
www.josephscott.com
(239) 573-7376

Wes Tuinstra · Answer

In my experience, 14% and 4 points is the going
rate these days.