Loan FAQ's
Rental FAQ's
Real Estate FAQ's
 

General Private Loan Information

 

Private Loan Definition:

A Private loan is a short-term bridge loan that is used for acquisitions, turnaround situations, foreclosures and bankruptcies. Interest rates, although high on business Private loans, are less costly than taking on a financial partners or losing the real estate opportunity altogether.

How long will it take?

Most loans close in less than 1 week.

How much does it cost?

A Private loan is often more expensive than a conventional loan.  Fees usually approach 5% of the loan amount and interest is often 12% or higher.

Who are Private Loans Ideal for?

Private real estate loans are ideal for borrowers who are unable to obtain funding through a conventional source. The properties or the borrowers are often clouded by legal or operational problems. Business hard money loan lenders can often help solve the problems and get the property repositioned for a conventional refinance.

Private Loan Lenders

All hard money loan lenders are different. The hard money loan lenders we refer clients to will usually consider income producing properties such as apartments, condo/co-op conversions, retail/shopping/strip centers, mixed use properties, industrial, office buildings, hotels/motels, medical, mobile home parks and restaurants, as well as non-income producing properties such as land acquisition, development and construction, bank workouts, foreclosures and bankruptcies.

How long do Private loans typically last?

Private loan terms are typically no longer than one to two years. The reason is simply that a longer term becomes too expensive for the borrower. With hard money loan lending, the goal is to have the borrower in and out of the hard money loan as quickly as possible. The hard money loan lender will analyze each transaction during the due diligence process for "good risk" -- to be sure that a property can be repositioned for conventional refinancing or sale within one or two years.

Private Loan Equity

The amount of equity needed for a hard money loan depends on the quality of the real estate and the hard money loan lenders themselves. The Private loan lenders Del Toro Holdings, LLC prefer 25% to 30% equity.

If you would like to apply for a hard money loan through the Del Toro Holdings, LLC, click on our Private loan application.

For more information on private loans, view “you should know” on our “Investor” page

 

General Rental Information

Are pets allowed?

Pets are allowed in some properties.  An additional deposit plus a slight increase in rent is usually required.  Please view the individual property’s description for further details.

What about my credit?

We do consider credit.  We are not going to turn you down just because you were late a few times on you Sears bill, but if you’ve recently been evicted or had a recent foreclosure, please don’t waste our time or yours.

Lease terms:

Leases are: month to month, 6 month and 1 year.

Please view our Home Leases for more information

General Real Estate Information

Why buy a house?

Here are some frequently cited reasons for buying a house:

 

• You need a tax break. The mortgage interest deduction can make home ownership very appealing.
• You are not counting on price appreciation in the short term.
• You can afford the monthly payments.
• You plan to stay in the house long enough for the appreciation to cover your transaction costs. The costs of buying and selling a home include real estate commissions, lender fees and closing costs that can amount to more than 10 percent of the sales price.
• You prefer to be an owner rather than a renter.
• You can handle the maintenance expenses and headaches.
• You are not greatly concerned by dips in home values.

 

What can I afford?

 

Know what you can afford is the first rule of home buying, and that depends on how much income and how much debt you have. In general, lenders don't want borrowers to spend more than 28 percent of their gross income per month on a mortgage payment or more than 36 percent on debts.

 

It pays to check with several lenders before you start searching for a home. Most will be happy to roughly calculate what you can afford and prequalify you for a loan.

 

The price you can afford to pay for a home will depend on six factors:

 

1. gross income
2. the amount of cash you have available for the down payment, closing costs and cash reserves required by the lender
3. your outstanding debts
4. your credit history
5. the type of mortgage you select
6. current interest rates

 

Another number lenders use to evaluate how much you can afford is the housing expense-to-income ratio. It is determined by calculating your projected monthly housing expense, which consists of the principal and interest payment on your new home loan, property taxes and hazard insurance (or PITI as it is known). If you have to pay monthly homeowners association dues and/or private mortgage insurance, this also will be added to your PITI.

 

This ratio should fall between 28 to 33 percent, although some lenders will go higher under certain circumstances. Your total debt-to-income ratio should be in the 34 to 38 percent range.

 

What is Fannie Mae's low down program?

 

Fannie Mae is expanding the availability of low-down-payment loans in an effort to help more people nationwide qualify for a mortgage.

 

Two new programs will help potential buyers overcome two of the most common obstacles to home ownership, low savings and a modest income.

 

To address many first-time buyers' struggles to save the down payment, Fannie Mae developed Fannie 97. The program provides 97 percent financing on a fixed-rate mortgage with either a 25- or 30-year loan term through Fannie Mae's Community Home Buyers Program.

 

Fannie Mae's new Start-Up Mortgage will assist buyers with a 5 percent down payment who are at any income level. Yet applicants do not need as much income to qualify and less cash for closing than with traditional mortgages. Borrowers will receive a 30-year, fixed-rate mortgage with a first-year monthly payment that is lower than the standard fixed-rate loan.

 

Freddie Mac, Fannie Mae's counterpart, also offers low-down-payment loan programs.

 

I am a first time house buyer and don't know anything about the process of buying. Can you help?

 

Absolutely! Our sales associates are trained to take you through the process from start to finish and explain everything to you. We even have a buyer's checklist for you.

 

How much will I spend on maintenance expenses?

 

Experts generally agree that you can plan on annually spend 1 percent of the purchase price of your house on repairing gutters, caulking windows, sealing your driveway and the myriad other maintenance chores that come with the privilege of homeownership. Newer homes will cost less to maintain than older homes. It also depends on how well the house has been maintained over the years.

 

How do I find the value of a troubled property?

 

Buyers considering a foreclosure property should obtain as much information as possible from the lender about the range of bids being sought.

 

It also is important to examine the property. If you are unable to get into a foreclosure property, check with surrounding neighbors about the property's condition.

 

It also is possible to do your own cost comparison through researching comparable properties recorded at local county recorder's and assessor's offices, or through Internet sites specializing in property records.

 

Can I use the rebate money for house closing?

 

Yes! You can use it for whatever your heart desires because it's your money, no strings attached.

 

How do I prepare the house for sale?

 

• Sweep the sidewalk, mow the lawn, prune the bushes, weed the garden and clean debris from the yard.
• Clean the windows and make sure the paint is not chipped or flaking.
• Be sure that the doorbell works. Clean and make attractive all rooms, furnishings, floors, walls and ceilings. It's especially important that the bathroom and kitchen are spotless.
• Organize closets.
• Make sure the basic appliances and fixtures work. Get rid of leaky faucets and frayed cords.
• Ensure that the house smells good: from an apple pie or cookies baking, for example. Hide the kitty litter.
• Put vases of fresh flowers throughout the house.
• Pleasant background music is a nice touch.