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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Hard money loans are made based on available equity. Posted by Ward-CA- on January 10, 2002 at 7:16 AM In Reply to: Hard Money/Equity posted by Megan on January 08, 2002 at 10:51 PM : If the house was already sold at auction, but still a possibiolity of retaining it, owners converted to 7, so makes $3400 a month with basically no other debt, what are our chances of retaining a hard money loan? Don't know at this point what the house sold for, but was worth according to taxes $129,900, but I imagine that it sold for about $123,00 or so. Do you have to have equity in the home to retain a hard money loan? Or does the debt to income ratio matter as well? Could afford $1100 per month. =•=•=•=•=•=•=•=•=•=•= Megan, yes, in almost every house loan situation the borrower has to have some equity. In some instances such a VA or FHA loan the federal government is guaranteeing or insuring the lender against loss. A hard money lender is often thought of as a lender of last resort who makes a loan based on the amount of equity the borrower has in the subject property. For example, suppose you had a property with a fair market value of $100K with only a $20K loan against it. You could go to a local hard money lender and get a loan of approximately $30K in 2nd position. The lender would feel quite secure since the combined balances of the 1st and 2nd only come to 50% of the fair market value, lots of protective equity protecting the 2nd’s position. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : If the house was already sold at auction, but still a possibiolity of retaining it, owners converted to 7, so makes $3400 a month with basically no other debt, what are our chances of retaining a hard money loan? Don't know at this point what the house sold for, but was worth according to taxes $129,900, but I imagine that it sold for about $123,00 or so. Do you have to have equity in the home to retain a hard money loan? Or does the debt to income ratio matter as well? Could afford $1100 per month. : =•=•=•=•=•=•=•=•=•=•= : Megan, yes, in almost every house loan situation the borrower has to have some equity. In some instances such a VA or FHA loan the federal government is guaranteeing or insuring the lender against loss. : A hard money lender is often thought of as a lender of last resort who makes a loan based on the amount of equity the borrower has in the subject property. For example, suppose you had a property with a fair market value of $100K with only a $20K loan against it. You could go to a local hard money lender and get a loan of approximately $30K in 2nd position. : The lender would feel quite secure since the combined balances of the 1st and 2nd only come to 50% of the fair market value, lots of protective equity protecting the 2nd’s position. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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