Developing relationships with HML before 1st purchase?

[Tim Vecchioni]

So I am finding my first problem. The fear of finding a deal and not being able to finance it. A lot of deals require a EMD. No problem. However, if you get that deal and put the EMD in, now it's on you to find the rest of the money. Plus POF are usually needed to even make an offer. Also how are you supposed to participate in an online / live auction without POF? My question is in situations where you need POF or to know the money will be there if a deal is found, how do you go about this issue!? Thanks!

[Jeremy P.]

I recently started compiling questions for Lenders from Big box, Private, and Hard Money:

• How long does a pre-qualification last?
• Since I will be doing this for Investment Properties will <LENDER> send me a proof of funds for the deals to be approved by the seller?
• Does <LENDER> have a specific title/attorney I would need to close with?
• Can I have a quick close? Does <LENDER> have an requirements on the property before closing?
• Does <LENDER> sell your loans or keep them in-house?
• Does <LENDER> allow investors with four or more mortgages to do a cash out refinance?
• What terms and loan programs does offer investors? ARM, 15-year, 30-year fixed, balloon?
• What interest rates does <LENDER> charge and what are the initial costs for your loans?
• What loan-to-value ratios does <LENDER> offer investors for a new purchase and a refinance?
• What are your seasoning requirements for refinances?
• Does <LENDER> lend to LLCs and/or Partnerships?

I was recently able to get these answered as I had a Lender email me daily for status of our initial 5 minute phone conversation, their responses: 

• Pre-qualifications are usually good for about 2 months, then we would just verify that everything is still good to go and issue another pre-qual if necessary.
• We issue a pre-qualification letter to provide to the seller, who may/may not contact me directly to verify
• In a purchase, the seller chooses the closing agency
• Depending on the circumstances, we can close a loan in about 30 days if everything is ready to go. A survey, title search, and appraisal are required.
• We sell our loans
• Yes, you can do a cash out refinance, but we will need to verify the expenses for all of those properties, the income they generate, and we will need to show evidence that you have reserves to cover PITI for those properties. Underwriter may require 6-12 months of reserves.
• Interest rates vary depending on credit score, debt-to-income, and loan-to-value and fees will depend on the property and type of loan refi or purchase. We have no origination fees on refis over 100K, but you still have prepaids, title, transfer taxes, and appraisals that will need to be paid. Origination fees depend on loan amount and pricing (lender credits) available at the time of lock plus prepaids, title, transfer taxes, and appraisals. (Our origination fees include processing and underwriting.)
• We have 15, 20, 30 year fixed, ARM (which I don't recommend with rising interest rate), we don't do balloons
• On a primary residence we could do 1% down if you don't own other properties, 3.5% FHA, 3-5% conventional (all would have mortgage insurance. On investment properties, you would likely need to put down 15-25% depending on the number of units.
• 6 months seasoning for refis
• No, we only lend to natural persons, but we can broker a loan to an LLC. In these cases, expect higher fees and interest rates.
• If you are looking to flip a house and only keep it for a short time, I can refer you to a hard money lender that can help you with that.

Rates at the time (last week) were 4.25% owner occupied and 4.5% non owner occupied at least for me.

After reviewing their answers I found this Lender that does 1% down payment if you don't own other properties. Who knew this existed? This could help out new Investors trying to get into Real Estate and FHA 3.5% is still to much for them. Combine that with First time home buyer and some creative financing and this would be a great thing.

Just keep an opened mind not all Lenders are Equal. Usually when I talk to Lenders I try to give them the most about me before the credit is pulled so as to not waste both our times.

Would love additional questions to ask Lenders or modifications to what I already compiled.