Real Estate Financing...

When I was asked to introduce and interview the new host for Blogger's Choice here on Active Rain, I was quite honored.  When I found out who I'd be interviewing, I was thrilled.  Few ooze class and professionalism more than the following person.  Without further ado (nice choice in wording Mr. Sardi:-) ... I give you ...

  Lola Audu!

*Did Active-Rain find you or you, it?  I would also love to hear your experiences, trials, & tribulations while you've been here!*

'Stumbling upon' would be the most appropriate way to describe how I started blogging on Active Rain.  I had been Blogging on Real Town Blogs for approximately a month and a half prior to joining AR.  I don't know how I found the site, but for some reason I decided to sign up. At that time, I had a butterfly that was my avatar.  I was very skeptical of being online...  I didn't loose the butterfly avatar for several months, but this was the post where 'the first sighting of Lola emerged."

The Parable...The Acorn & The Butterfly.

The most significant challenge when I first came was just being overwhelmed by the incredible amount of talent and information.  I had never had the exposure to so much knowledge about real estate and technology.  It was in a sense, all consuming.  Finding balance personally and professionally continues to be something I work on everyday.

*Most who read you realize what a very astute writer you are, how'd you come about learning how to write?  Who are some of your favorites, whether on AR or the New York Times Best Seller List:-)

Astute...now, that's a word that I need to look up.  Excuse me for a moment...

According to the Free Dictionary online, it means "Having or showing shrewdness and discernment, especially with respect to one's own concerns." 

Hmm...well, I'd agree with discernment, but I had never thought of myself as shrewd.  I'm not quite that calculating.  But, I would say that over time, I have developed about 3 different audiences which I think about when I'm writing.  (my clients, other agents/brokers, those I'd like to inspire...have I covered the world yet?)

On how I learned to write.  Well, it's funny but creative writing was something I liked doing at school, but didn't think I was very good at it.  Getting all the syntax and grammer right always seemed to get in the way of saying what I intended.  I have written outlines for courses that I've taught, but would NEVER have imagined that I'd be writing over 400 articles from scratch.  Writing for me is an outward flow of my thinking.  It's a conversation that's occuring with my fingers rather than my mouth...

I like good writing whenever I find it.  Some of my favorite writers here on Active Rain for prose are:  Broker Bryant, Elizabeth Nieves, Andrew Lenza, Linda Davis, Gary Bolen, Jason Sardi, TLW aka The Lovely Wife, Geno Petro, Elizabeth Weintraub & Chris Elizabeth Griffith.  Then there are so many whom I admire for their tech ability, Jeff Turner & Missy Caulk come to mind and others for their community Spirit, such as Midori Miller, Sally Cheeseman, Kathy McGraw & janeAnne Narrin.

Favorite Blogger outside the "Rain"...Seth Godin

Books I'm currently enjoying...just fininished "An Unaccostomed Earth" by Indian author Jhumpa Lahiri...breathtaking prose...just beautiful.

Boy, Jason...you will have to condense this interview big time...2 Questions and we've already covered enough material for 2 blog posts. :)

(Not to worry Lola, I may actually earn my 200 points today.  Besides, you get mad props for mentioning little old me amongst your favorite Bloggers.  This is good reminder folks.  It's never a bad idea to suck up to the interviewer!)

*Do you have a core philosophy about Blogging?  What are some of your favorite posts that you have written?*

Core Blogging Philosophy...Write from the heart...the blog is done when it resonates there.   Favorite posts...   This is hard.  I write for business and for inspiration. I'd choose the following from Inspiration...   What I Learned from the post Sarah Cooper told me NOT to read...   What I learned from the post Sarah Cooper told me NOT to read.  and from Business...   The New Wild West of Real Estate...( A 6 part series on Short Sales & Foreclosures)   Part 1 Link:  The New Wild West of Real Estate...Negotiating a Short Sale! (Part 1)  The series that I've enjoyed doing the most is "What It Means..."   This series involves looking at things that have had a profound impact in my life.     

*If AR entered a show-down with some of the other High-Octane Real Estate Blog Sites and you were in charge to hire 5 Bloggers to represent AR, who would they be and why?*  

-Lenn Harley...writes some of the best real estate stuff out there. Her Hard Core Real Estate posts could be a text book!  And she is remarkably productive!  

-Jeff Turner...again prolific...I think of Jeff as high tech with a heart.  Good blogger, but always on the look-out for the next best thing and willing to share his finds everywhere...Serious, he's a face I expect to find on any site worth joining.  

-Jeff Dowler...Excellence in local blogging.  Interesting & indepth analysis of the local scene in southern California, but also writes insightful articles about real estate and life.  

-Craig Shiller...brilliant writer, brings insight and creativity to the art of staging and doing it right.   

-Janet Gauilault...one of the best writers that I've read in the mortgage industry.  She knows her stuff and can explain it to the rest of us.   As you can see, my 5 choices reflect an emphasis on real estate and financing.  

The question was about a High-Octane Real Estate Site.  While I love non real estate related blogs and write them myself, I think that a real estate networks greatest cache is in making real estate interesting, informative and relevant.    

*Most folks remember their first transaction.  Sometimes it is a nightmare, sometimes it goes smooth.  Do you recall your first closed transaction in Real Estate?  Can you summarize that transaction?*

   Yes, I remember vividly my first transaction.  I had asked some friends if I could "practise" my listing presentation on them.  They agreed.  At the end of the presentation, they said, "Where should we sign?"  I thought they were kidding.  I was totally unprepared for my first listing and had to scramble to find someone who knew how to fill out the paperwork.  They ended up selling their house and buying another one within 4 months.    

*The idea behind 'Blogger's Choice' is a great one.  Got any plans in store as the New Host?  

Blogger's Choice evolved out of observing some of the discontent expressed about Featured Posts. The truth was that there were some excellent posts that were being missed for a variety of reasons.  I thought that it would be great to give bloggers the opportunity to speak for themselves about the content which they wrote and to have the entire focus of the group be driven by contributing members.    That was the idea behind having a Spotlight in which one member could choose posts they liked.  The other important aspect of the group was to get to know people better...thus the idea of introducing the host with a separate post.  It's an Open Source Group, so we're open to ideas and ways to improve.  Blogger's Choice belongs totally to the members.  I was simply a catalyst.    

*Do you recall who you first 'Subscribed To' on AR?  Are they still active here?*  

I have absolutely NO recollection of who I subscribed to First on AR.  And...that is NOT a politically astute answer. :)  

*Outside of Real Estate, what are some of your interests?  What is Lola doing at 9:00 on a Saturday Night?*

   Outside of Real Estate, I enjoy spending time with my family and friends.  I like a good movie and trying different restaurants.  We also do a fair amount of entertaining.  Saturday night often finds me online finishing a blog post before mid-night.  Then I'm totally disconnected from anything electronic until sometime on Monday.  This is when I catch up on my TV viewing and books that are piling up by my bedside table.  

*There's got to be something in life you haven't done but have wanted to do?  What might that be and what the heck are you waiting for?*

   Now, this is absolutely hands down the best question of this interview.  There's a lot of stuff that I'm working on or working through.  We'll leave it at that...  

*How did you generate your business when first starting out?  Does it differ from now?  What would you say to newer agents and even those who now may be struggling, to let them know how to generate more leads and business?*  

When I first started my real estate career, I had a trainer who told me I was sitting on a gold mine.  He was referring to my sphere of influence.  It took me awhile to understand what he meant, but he was right.  Relationships have always been the center of my life.  Starting with my relationship to God, my family and friends, this thread weaves itself through my business.    I care about people and I care about trying to determine what works for them.  I'm intrigued by the WHY behind the transaction.  My advice to newer agents would be to spend your time wisely...avidly seek a good mentor, respect their advice, time and attention and then DO what they tell you to do. There's a reason why it works!    

*Can I have an autographed business card?*  

Are you serious?  Nobody has ever asked for my autograph. LOL     Thanks Jason.

No, thank you Lola.  I'm still waiting for that autograph though;-)

Perhaps it is time to live again ...

Assuming he hasn't wrote it as of yet, I got a dollup full of inspiration the other day by Mr. Scott Geary.  We like to share stories, experiences, & idealogies on the lending industry both now and before.  While Scott's knowledge and experience far exceed mine, I'd like to think I have a bit of something to add to the equation.  And if and when I don't, Scott probably just pets my ego and laughs internally:-)

A recent conversation created a quote.  The quote, while I'd guess has been said before, was a REAL eye-opener for me.  "If you are walking through the desert with $15.00 to your name and come across a cup of water that costs $15.00, you'll buy it because that is how much it costs.  At that moment, that's the only game in town for your specific situation."

It went something like that, I'm paraphrasing that quote at best.  Yet, what I took away from that was something that may be ugly ... but seems very true.  That's the reality of Capitalism and I'm pretty content with that at the end of the day. 

While it sometimes seems unfair, unjust, less than ethically human, that is the game.  Most of us play it, win or lose, each day of our life.  How we play it differs, but it is played.

Consumers, aren't we all, can learn something from this in my estimation.  So can any Professional involved in a Real Estate Transaction!  The Art of Debate 101 = know the other side before you get there.  Education & Conversation will continue to go a long way in making sure that happens.  They always have.

There may come a time when I'm walking through that desert, trying to quench the very thirst that sustains life.  And when I come across that cup of water costing $15.00, I hope to have a canteen in my back pocket and continue walking right on by ...

Ripe & Ready, Fast & Heady, he ran for his life ... but life had moved on...

I know a lot of folks are feeling the crunch.  I'm not just talking about the infamous 'Credit Crunch' ... I'm talking a true financial crunch.  I spent $30.00 this morning making sure I had a half a tank of gas.  That's something to say when I drive a beat up Cutlass Sierra.  That's the one thing about cars and me, I'll buy them in cash and drive them until they are a rusted shell of their former self.  That's one thing I don't waste money on.

I wish I could tell you wages are going up, taxes are going down, Health Care will be one less of a worry, gas prices would be remotely reasonable anytime soon, and the Chicago Cubs will be winning the World Series this year.  I can't though.  What I can do is share a phrase that I loved from the moment I heard it.  You may be surprised to learn that phrase came from one of those fake phony mindless Professional Wrestler Types.

I've wined and dined with Kings & Queens, slept in alleys eating pork & beans.

'The American Dream' Dusty Rhodes said that.  Ironic, since a version of that very 'American Dream' is under more scrutiny than Barack Obama attending a right wing dinner party. 

I took two things from that highlighted statement above; I've been there, I've done that.  I've sipped the finest Red Wines and went to bed in the coldest of confines ... awaking in each case to the knowledge that I have to Adapt or Die!

Money is an interesting thing.  When you really think about it, the concept is so meaningless, yet it substantiates our existence and helps to challenge the very existence we constantly try to substantiate.  Here a piece of paper, there a coin, let's be honest about one thing under the scope of it all.  I don't much care what you believe happens after you leave this earth (in the physical, old-age, aspect at least), because 'that thing called Money' is something you probably can't take to the grave ... or next adventure.

Money is vital though, it allows me to smoke a cigarette, drink a beer, type some words, live under a roof, and play 'hide the pinky with Politicians everywhere.'  Money may well be the so-called 'Root', yet we are the ground it grows from.  One may ask, "Yo, Sardi, can you think of a better way if this money thing is such a problem of human kind?"   My answer, "Not right now."  We are stuck with it, it's damn time to make it work.  There's no better time for that than when it is in its most curious state...the psychological one!

Money is one less thing to worry about.  At the end of the day, with my conscious clear and free, I'm not thinking about how I'm going to pay my next utility bill, I'm thinking about how my existence will make ME and those around ME ... happy, or at least better off for knowing me.

Money is a short-cut to thinking. 

Yup, I'm ripe and I'm ready.  I just want to make sure I'm fast and heady ... I don't want life to move on, I want to move life.  Whether I'm dining with Kings & Queens or sleeping in strange alleys eating pork and beans, or sailing clouds and golden streams ... there's a method to this madness. 

Give a stranger a hundred dollar bill and witness how fast they leave their feet in joy.  Especially if they are poor ... even though by receiving it they may be that much poorer...

Adapt or Die!

J.M.S.

I'm well aware that most of us fancy ourselves smart shoppers.  Whether we are buying a car, groceries, looking for the next Gas Station, sorting through bids on our next Home Improvement Estimate, shopping cell phone carriers...etc... we want the best deal.  We want it cheap and efficient.

After over 7 years of being in the Mortgage Business and learning from and being trained by folks who have been in the business since Jimmy Carter took office, I've learned two things.  Like any job, this can be frustating as hell, but I absolutely love what I do.  I've also learned how to shop smart!  I'm only licensed in Pennsylvania and have friends & family outside the confines of where I can lend, they count on me to guide them accordingly.

That written, I want to pass some of my own personal thoughts on how you as a consumer can shop smart to make certain you are getting the best Mortgage for your needs.  I'd ask for a drum roll but realize you have better things to do ... so I'll get to it.

 5 Ways of Shopping Smart For A Mortgage:

-  Begin the conversation with any Mortgage Company/Direct Lender/Bank with the following question, "What's your Interest Rate?"  If the person on the other end quotes you a rate, hang up!  Well, don't hang up ... that's kind of rude, just say thank you and you'll get back in touch with them.  If you are being quoted a rate without them knowing anything about your financial situation, credit score and history, short and long-term goals, they aren't doing their job and won't be doing your situation any justice at all.

-  Education is always key.  While I love to know the what's in what I'm shopping for, I demand to know the why's of what is available and at what price.  Look for a teacher, not a preacher.  If they use the two ears they have and listen, what comes out of their mouth becomes all that more important.  Your goals and desires and needs are on the line, seek out an advocate of those very things.

-  There's another question you should ask, "How do you make your money?"  In any 'sales' occupation, this tends to throw some off if the consumer dares to ask that question of the Professional.  Ask that question though, it's relevant.  If they are doing right by you, they are earning every penny.  The price you will be paying for this service will be worth its weight ten times over on one of the biggest financial transactions you will ever partake in.

-  When narrowing down who you want to make application with, my suggestion is to narrow it down to three entities.  Ask a family member, friend or co-worker to refer you someone they had a good experience with.  Go to the bank you hold your depositories (checking & savings accounts) with.  Finally, do your own leg work by making a few calls and Internet inquiries, you'll want to shop with at least one Mortgage Broker.  Use your gut to get a feel for the guy or gal who just clicks with you and your needs. 

-  Service & Availability.  This is a huge one!  Answering emails, returning calls, meeting with you at their office, being there every step of the way and beyond your loan closing ... that's probably the person you'll want to deal with.  Having someone to inform you every step of the way and call just to say, "How the heck are you?" is something special & human.  I don't know about you, but I want to go shopping at a place that is special and quite human.  In the end, those folks tend to treat you the exact same.

Don't ever be a Statistic!

Jason Sardi

Mortgage Consultant

First Choice Equity Group Inc.

610-439-2166 ext. 229

Toll Free @ 1-866-262-8720 ext. 229

jsardi@fcegi.com

Licensed with the Pennsylvania Department of Banking

There's one thing about change that seems constant, frustration.  For Mr. & Mrs. Homeowner, it can be downright mind boggling with all the changes that have occurred and probably will continue to happen in the Mortgage Financing Market.  It's hard to keep up and the only saving grace to be had is that of clear & present education, as it happens. I was inspired to write this post because of some folks that called me looking to refinance their existing mortgage.  I haven't saw this topic written about much at all and think it has to be addressed.  The following is their situation...

Sal & Vicky consolidated all of their high interest credit card debt with their mortgage a little over a year back.  In turn, this boosted their credit scores dramatically and their credit now gleams with a stellar rating.  Recently, Sal & Vicky found out that they are having another child.  This being their second child, Vicky wants to cut down her work schedule to spend time nurturing and bringing up their children.  Yet, cutting back her work schedule also entails cutting her income in half...at least temporarily.

Meanwhile, Sal stands a good chance reaping the rewards of hard work by moving up within his company and also in his pay.  Assuming that happens, it isn't likely to happen for at least 12 months and it isn't anything they want to necessarily bank on.

They are in a position where their life changes also translate to a change in their financial needs.  Less income will be coming in, same old debt going out.  While I had never worked with them before, they found my information and gave me a ring.

Initially, Sal & Vicky thought it a good idea to list & hopefully sell their home.  This way, they could downsize for the short-term and then turn around and buy another house of similiar size & price down the road.  So, they listed their home on the MLS with a REALTOR.  But then Sal did some thinking, "Why not just refinance into a program that allows for a lower payment for a bit, rather than sell our home now and buy something similiar at a later date.  Heck, we love this home!  The neighborhood is perfect!!  This would enable us to sail through our life changes and avoid moving backwards in our quest for continuous forward motion for the lives of our family."

Rather than sifting through the programs that are available for their situation, I want to get to the point of this post.  Listing your home limits your lending options if you are thinking about refinancing as well.  Let me repeat, listing your home limits your financing options.

Some Lenders require the home to be off the market for 6 months, some 12 months.  Look into your refinancing options before you list your home, if each is a consideration.

Here's why:

-  Conventional Lending Institutions have what I like to call a 'Cover Your Keister' clause.  Meaning, let's say you refinance and then go to sell your home anyway after you do.  Because of the typical costs associated with refinancing, it eats at the equity you have in your property.  That's not necessarily a bad thing because when you refinance, the idea is to put yourself in a better overall financial situation.  However, if you go ahead and sell your home shortly after you refi, you may be inclined to come back and say, "all those costs ate up my equity and now I can't get out of my house what I need too."  Hey, I have a Robin Hood mentality in this Corporate World (without the stealing thing) but I understand the mind-set.  Heck, if they give you a free cup of coffee with your refi and you spill it on yourself....well, you get the drift I hope. 

-  Let's say you put your home on the Market for $280,000 and it's on the Market for 2 weeks.  After those 2 weeks you decide to refinance instead and the appraisal comes in at $300,000!  Well, that is wonderful but let's take a look into the Lender's thoughts...."I know the Collateral we are lending against is appraised at that, and it seems a very good and accurate assessment.  Yet, that very Collateral was on the Market for 2 weeks at a lower price and didn't sell.  This doesn't give us much confidence in the Collateral we are lending against, God Forbidding something happens and you default on your Mortgage.  At that point, we are stuck with Collateral we are now unsure of in regards to its Market Worth."

Make sense?  I hope it does.  Bottom line, there are programs available to refinance your property one day after you take it off the MLS.  Those limit your options though.  So, if refinancing is even a thought in your head... talk to a Mortgage Professional before you even think about listing your property for sale.  Your options will remain open and the best route will be for the taking....

Jason Sardi

Mortgage Consultant

Toll Free: 1-866-262-8720 ext. 220

Locally Here in Allentown: 610-439-2166 (same extension:-)

jsardi@fcegi.com

Licensed with the Pennsylvania Department of Banking

And My Mother Loves Me... and I, her!  Happy Mother's Day Mom!!!

I'm finding more and more that small businesses across the land aren't taking full advantage of the wonderful financing opportunities afforded to them via SBA Loans.  Small business & Real Estate are vital to the growth and evolution of our culture & economy...in my humble, yet significant opinion:-) Today, I'd like to take a look at Commercial Real Estate Financing through an SBA loan.  I'll go over some commonly asked questions and give you the answers to better help you decide if an SBA loan is a good fit for your Commercial Lending needs.  You'll want to contact your Mortgage Professional for further questions and/or to proceed.  I am a Mortgage Professional licensed throughout the State of Pennsylvania.  So, if you have property or looking at property here in Pa, I'm your Huckleberry!

Acquisitions, Expansions & Refinances

* Fixed, adjustable, and collared rates available with several prepay options to match your financing needs.  There's flexibility here folks, this sure helps to ensure you aren't trying to stuff round holes with square pegs.

* Up to 90% financing, including property improvements and ground-up construction.  Frankly, this helps keep a bit more money in your pocket!

* Loan terms up to 25 years.

* Knowledgeable in Section 1031 exchange transactions.

* Eligible to receive a Line of Credit for working capital.

FAQs

Why should I choose an SBA loan versus conventional lending?  SBA lending offers many advantages over conventional & bank lending, including longer amortizations, lower equity injection in most cases, very competitive interest rates, and the flexibility to include equipment, refinance of existing loans, and working capital into the building financing.

What types of properties can be financed with a SBA loan?  Any type of property, the stipulation is that the property will be used by an eligible small business which occupies at least 51% of the property being purchased (60% if the loan includes ground-up construction).    Properties that are considered ineligible are those such as multi-family, churches, self storage, mobile home parks, and investment properties.

What is the term difference between an SBA loan and a conventional loan?  An SBA loan offers a longer term of 25 years compared to a 20-year term for conventional loans.  This translates nicely into a lower monthly payment:-)

Can an SBA loan be used for ground-up construction?  Yes, not only is construction eligible, but all fees associated with the land purchase, construction, design, etc. are eligible.  Under certain programs, moving expenses and working capital can also be added to ensure a transaction that is smooth as a baby's behind.

What are SBA requirements for owner occupancy?  The SBA requires at least 51% occupancy to the operating company purchasing a building --- 60% on new construction.  Remaining space should be commercial occupancy.

Is my loan assumable if I need to relocate to a large building?  Under what's called the 504 loan program, the SBA's second mortgage loan is assumable; although, the buyer would need to qualify for a new first mortgage, and the assumption is at the discretion of the SBA.  This can be a huge selling point for attracting buyers to your property!

Can I refinance my real estate with an SBA loan and cash out?  A refinance is possible if it meets the criteria of the specific loan program.  The 504 loan program can only be used to refinance in a 9-month time frame from the initial completion of the project and does not include any "cash out."  There's another program that can be used to refinance an unfavorable loan and can include working capital or money to be used for expansion and equipment.

More Niches You May Want To Check Out!

REHAB LOANS

STATED INCOME INVESTOR LOANS

SBA LOANS

MANUFACTURED HOME LOANS

LEASE PURCHASE FINANCING

Jason Sardi

Mortgage Consultant

First Choice Equity Group Inc.

610-439-2166 ext. 229

jsardi@fcegi.com

  There's a certain humility in money.  If you have it, you count on people accepting it to get what you want.  If you are trying to make it, you count on people 'buying' whatever it is you are doing.  If you are alone in the woods with more money than you can imagine ever having, it does you no good.  Money only matters because of us....we are surrounded by others seeking the same fortune and comfort.  Once I understood this, money still mattered to me.  It just mattered a whole bunch less than the humanity that I knew was irreplaceable.

When I bought my house in December of 2006, there were a few things I did right out of the shoot.  An amigo of mine gutted and totally revamped the bathroom.  So, instead of looking like Al Bundy's eternal dwelling in 'Married With Children' ... my bathroom now may just be suitable for Martha Stewart to at least wash her hands in.  The other thing I did was replace the kitchen floor.  All this was done just months after buying my home, but there was still more to do....

I knew upon buying my home that the siding had to go.  So, it being Spring and all, what better time to go shopping for siding than now?  In a matter of weeks, I've had five estimates and am awaiting one more.  Earlier this morning, I had back to back appointments for estimates on getting the work done.  One thing stuck out in all this, I had to do deal with that dreaded entity called 'Sales People.'

They come in many forms, sizes, shapes, & shades.  They come to help convince you that you are making a wise choice in choosing them over any other.  They come to provide a service in which you pay for.  (Sorry Mom, I just ended yet another sentence with a preposition:-)

I never thought that I would be a sales person of any kind, but I was tad ignorant in that I guess.  Heck, I don't care what you do....if you do it for money, you're in Sales.  And that's fine.  That's our culture, our system, our imperfect world.  While I've gathered and learned about those that are more financially successful than most, some of the methods just aren't my cup of tea.  To me, sales is like Life & Sex, it comes from the hip. 

Five estimates down and one more to go.  The estimates have ranged from $3,000 to $13,000 at this point.  Gee, I wonder where the differential in price truly lies?  Price is certainly a vital consideration, yet I'll choose according to a little shopping secret I've learned from being in sales for the past seven years.  If they aren't willing to shut up and listen, the only thing they are really selling is themselves.  While that's wonderful glorious superb dandy great & fine, sell me trust.  Sell me trust!  Sell me that I can call you if I have questions or something goes wrong after the fact.  Sell me that you would have a drink with me if I decide that another offer and entity is better equipped for my situation than yours.  Sell me that you'll work with me even if I don't sign the dotted line today.  Sell me that I'm more than a number, more than just an inconvenient stop on this travel of your life.  Sell me that whatever happens, you are the expert on this particular cause and you'll guide me in the right direction.  Sell me cause we are the same.  It's that damn Humanity Thing...

Two ears, one mouth....use accordingly.  Sales is listening to those looking for help and providing the service to help them.  I learn something new everyday.  Today I learned that I should listen more....or at least ask the right questions to make sure I'm providing the right services and results.

(Don't Be Afraid To Click Here!)

So, what did you do or going to do with your rebate?  Personally, I've already received mine.  It will cover my electric bill, my gas bill, and perhaps grant me a few Happy Meals down the street and maybe a cold case of Arizona Green Tea:-)  While I always appreciate a few bucks thrown my way, I'm not sure how much of a stimulus this package will be for our economy.

While this recent economic stimulus package rebate of $600 will be enough for some, others have bigger dreams and bigger needs. Like paying for college, home renovations or finally getting rid of those pesky high interest credit cards. For those that do, there are different solutions - cash out loans with reasonable guidelines to really help you get the money you need - and get it in days, not months.

Now, Non-Traditional or Sub-Prime Loans have gotten a bad rap within the Industry & the Media....some of that 'Rap' very warranted.  Yet, there are plenty of folks who don't fit into Conventional Guidelines or who can't qualify for government loans such as the FHA or VA.  Where are those folks to go?  A lot of those folks always pay their mortgage on time, have a decent amount of equity in their home, yet get turned down for these types of loans.  In my view, there will always be a market for Non-Traditional or Sub-Prime Loans.  Always.  It is vital for you as a consumer to contact a Mortgage Professional who can explain the different programs currently available and together decide what is the best program for your particular needs.

Cash out guidelines we have available:

• $100,000 cash out up to 85% LTV (Loan compared to the value of your property) and full income documentation

• $100,000 cash out available up to 80% LTV with bank statement programs to document your income for those who may not get W-2's or Pay-Stubs.

• Cash out exceptions considered at lower LTVs

• Mortgage lates allowed

• Loan amounts up to $750,000

Let First Choice Equity Group get you the cash you need, when you need it.  Feel free to contact me today and let's make it happen.

Jason Sardi

Mortgage Consultant

610-439-2166 ext. 229

jsardi@fcegi.com

In this ever-changing Market, Niche Products are not immune to changes, sometimes overnight.  While this certainly doesn't define the term 'Ideal' ... it is the reality in which we live.  I wanted to take some time to update our Rehab Loans, which are an excellent Financing Source for new and seasoned investors alike.  In Pennsylvania, areas such as Philadelphia, Harrisburg, & Wilkes Barre are just a few ripe places where you can find good deals on properties that are great fits for this product.

So, here are some Frequently Asked Questions about Rehab Loans here in Pennsylvania:

What is a Rehab Loan?

A Rehab Loan is designed to allow an individual to purchase or refinance an existing home and base the loan off of the ARV (after repaired value).  By basing the loan off of the ARV, in most cases, you can include the purchase price or payoff, the cost of repairs, and closing costs.  There is a minimum cash injection that is now required on all Rehab Loans that I'll address in a hot minute.  This loan is perfect for that seasoned investor, first time home buyer or just someone looking to add on or give their current home a face lift that Joan Rivers would envy.  To boot, it does minimize out of pocket expenses.

Can you give me an example of a Rehab Loan based on a purchase?

But of course!  Let's say that you are going to purchase a single family, distressed home for $40,000.  You and your contractor walk through the home and you both decide that it's going to take $30,000 to bring the home up to date and safe for living.  At this point we would give a Licensed Real Estate Appraiser the purchase contract and the bid for cost of repairs.  The appraiser's job will be to give us an ARV (after repair value).  So the appraisal is done and the ARV is $100,000.  Under the guidelines, the maximum can be 80% of that amount which is $80,000.  So far you only need a total of $70,000 ($40,000 for the purchase and $30,000 for the cost to repair) so you have up to $10,000 to use towards closing costs or even more repairs.

How much and what is "cash injection"?

All Rehab Loans now require (at one time they did not) a minimum Cash Injection by the borrower.  This number is figured by taking a set percentage of the total of the purchase price and the cost to repair.  So using the figures on the previous example given, if the purchase price and cost of repairs totals $70,000 and the property will be owner occupied, then the percentage used is 3% which is $2100.  This money is required to be out of pocket and can not be offsetby seller concessions.  If there was a deposit placed on the purchase contract, then that would be deducted, if not it would need to be brought to the closing table.  If the property will be used as an investment, then the required Cash Injection would be 5%.  If the loan amount is over $250,000, then it is a minimum of 10% Cash Injection across the board.

What if I am a contractor & the borrower, can I do my own work?

You can if you are approved through my Investor's Construction Loan Department.  While they aren't the most exciting folks on Planet Earth, they tend to be pretty fair.  There is a required set of documents that must be completed and submitted to the department.  Once they go through and review all of the information, they will render a decision.  If not approved, you must hire a General Contractor or you won't be approved for the loan.  In my experience, applying to be a Self GC should be done as early in the loan process as possible, just in case you are not approved to do so.

What is the criteria that is required to be approved for a Rehab Loan?

There is minimum credit score requirement and there are income requirements.  Currently, the Mid-Score has to be 660.  (Please call or email me for more details on that though).  We do not offer Stated Income Loans on this product so, you must be able to qualify and prove an income.  There are Bank Statement Programs though, where 70% of deposits can be used for personal statements and 50% of deposits can be used for business bank statements.

Is this a Balloon Mortgage like a Construction Loan?

No, the Rehab Loan is an actual mortgage amortized over 25 or 30 years, on a 1 year ARM.  If the property is Owner Occupied then it is amortized over 30 years, Non Owner Occupied is amortized over 25 years.  The loan is repaid by monthly principle and interest payments.

How are the draws structured for the repairs?

On a Rehab loan, the money to repair the home is dispersed by percentage of completion.  This means that once work has been done, then a draw can be ordered and then money will be dispersed according to completion.  My Investor always disperses 10% of the cost of repairs at closing to start the project.  If the total cost of repairs is under $50,000, then there will be three reimbursement draws available for 33%-33%-34%.  If the total cost of repairs is over $50,000, then there will be four draws all at 25% each.  Again, other than the 10% draws at close, all other draws require that work be completed, they are not draws given to do work.

Thank you for joining me here in an updated look at Rehab:-)  There are still great deals to be had, you just got to know who has access to the purse strings to finance them.