Another broker (not sure whether he works for any particular bank) simply asked to provide all the info and he will give me a pre-approval letter. 

As for getting the Owner to take their $160K price and doing OCB for 30 years at a ridiculously low APR (like say 4%), I would say go ahead and try, because $800/Mo is way better than HML 15% Int Only on $100K for first year ($1300/Mo).  

Sure but limited since its 6 months but this risk is discussed in the pro's and con's discussion upfront.Having that 2-3 points (VAFF upfront) dramatically increases your effective cost of financing.The myth or fallacy with "APR," is that its spread over 30 years so APR looks lower than it really should especially for owners who sell or refinance out in less than 30 years.Example.

Hi just wanted to know if some things to be careful if when selling a pre-foreclosed property I have under contract.

He definitely has the money and is willing to pay points, but just thought fewer points and a higher APR might be attractive to somebody.  

I own a pre-approved 5 acre tract, 28 lots and trying to decide whether to sell or find some investors and develop it.

That is a 41% APR"I am including the documents and contracts in case you want to see what I saw when I decided to invest with him.Here is the projected ROI that I got in the email:Now here is deed of trust and the contract that I got when I invested with him:Now, I recognize that I made plenty of mistakes with this process.  

Go at least attend one and take notes along with a pre-draft comb sheet of the properties that's being auction.

If I had just $150k to lend, and the basic rate is 2 points in, 12% APR, 2 points out, 6 month term, I'd be making $1500/mo. plus $3k origination and the same on termination.  

Commercial loans are a contract and can contain a pre-payment penalty or not just depends what you and the lender agree to.