Private Money Loans
Capitol Mortgage Company has been providing Private Money Loans (PM) to our buyer clients, since 1993. The reason buyers choose to use a private money loan is either because the buyers or the property do not otherwise qualify for traditional or government loans. These days private money loans provide one of the only viable financing alternatives to traditional loans. With this type of loan, an appraisal is not always required for non-owner occupied usage, so rehab properties can often be financed. For investor buyers, rental property private money loans are somewhat easier to place than primary property private money loans. Our private money financing provides viable options for realtors, buyers, and sellers to compete with “all cash” purchases.
Typical Loan Features – Private Money Loans
- Not entirely credit based, but better credit helps
- Appraisals are required for owner-occupied homes, unless the loan is less than one year.
- Appraisal may not be required for non-owner occupied purchases
- Value can also be determined by Real Market Value or realtor’s valuation, rather than just by an appraisal.
- We can sometimes use the highest valuation, rather than the purchase price.
- Loan to Value range can be 30-70% based on the actual value and 65% LTV is typical.
- Private Money loans can fund quickly, generally in 1-4 weeks.
Typical Loan Requirements – Private Money Loans
- Demonstrated borrower acceptance of the higher loan interest rates of 8-12%
- Demonstrated borrower capacity to handle the monthly payments