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 Frequently
Asked Questions About Hard Equity Loans
"The only stupid
question is the question not asked."
- Mr. Raymond Wertheim, Gary Opper’s 8th Grade Science Teacher
What Is A Hard Equity Loan?
A Hard Equity Loan is:
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a loan approved based on sufficient equity in the real estate
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a
stop gap measure to give a homeowner time to correct any situation
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a
loan that a borrower needs immediately and does not have time for any
qualifying
-
a
loan when the borrower cannot or will not verify income, employment, credit or
other assets or debts
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a
loan when the borrower cannot qualify for traditional financing
A Hard Equity Loan is a loan where the Hard Equity Lender qualifies the real
property. The lender does not
significantly consider the mortgagor, the mortgagor's income, employment,
credit, debt ratios or other assets.
A Hard Equity mortgage lender determines property values by his personal
experience or a real estate appraisal.
Why Should I Choose Approved Financial
Corporation over other Hard Equity lenders?
Approved Financial Corporation has proven since 1994 that it is the standard in
professionalism, service and knowledge in the Hard Equity Lending niche.
Our fast, friendly and flexible approach to “No questions asked” loans
provides quick approvals and rapid closings for you or your customers.
Are Hard Equity Loans Easy To Close?
Yes, Hard Equity Loans are Easy to close!
This is because:
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No income is verified
-
No
employment records are verified
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No
debt ratios are calculated
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No
credit reports are reviewed.
What Are The Advantages Of A Hard Equity
Loan?
The following are advantages of a Hard Equity loan:
FAST – AFC closes Hard Equity
Loans quickly. Little documentation is needed as compared to traditional
financing. Hard Equity Loans
typically close in a few days.
NO DOCUMENTATION OR EXPLANATIONS
- A Hard Equity borrower does not need to explain credit, financial, family or
other problems.
NO VERIFICATIONS - Hard
Equity Loans do not require the verification that is required with traditional
financing.
FLEXIBLE - AFC will structure
a loan to satisfy your borrower’s need.
Our rates, pricing and terms are matched to a borrower’s needs.
This is the opposite of a traditional loan when a borrower must fit into
a traditional lender’s mortgage program.
CLIENT PROFILE – AFC is not
demanding. We are easier to please
and eager to please you and your borrower.
We understand that your borrower wants his money quickly.
What About HOEPA Or Section 32 Loans?
In some cases, the Home Ownership Equity Protection Act of 1994 ("HOEPA") has
modified the Hard Equity Lending business. Most Hard Equity Lenders do not
allow for HOEPA loans. AFC
does not permit HOEPA loans.
What Are Some Other Names For Hard Equity
Loans?
Some of the other names for Hard Equity Loans are:
What Do I Look For In A Hard Equity
Lender?
Your Hard Equity Lender must be:
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Fast
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Flexible
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A
direct funder
AFC is all of these!
First, a Hard Equity Lender must be fast.
As with all borrowers, a Hard Equity borrower wants his loan "closed
yesterday." To be fast the
lender must be an experienced full time Hard Equity Lender.
Second, a Hard Equity mortgage lender must be flexible and adaptive to the
uniqueness of each transaction. Unlike
a traditional loan that has to fit exactly into the "box", a Hard Equity Loan
by its very nature is unique and must be handled and analyzed individually.
A typical traditional mortgage lender's investment matrix or grid will
not work.
Third, a Hard Equity Lender must be a direct lender.
A direct lender lends his own money.
It is inefficient to deal with a lender who is actually a mortgage broker
“shopping” your loan. Deal
directly with the lenders!
Also, a full time Hard Equity mortgage lender is a licensed professional money
lender. He is not a part time
lender who happens to have some extra money to invest.
A professional Hard Equity Lender has the time and experience.
The Hard Equity Lender will quickly inspect a borrower's real property,
will quickly approve the loan and will quickly make skilled decisions regarding
the borrower's mortgage.
How Does A Hard Equity Loan Differ From A
"B/C" Loan?
A Hard Equity Loan is based primarily on the equity in the real estate property.
There is no income, no stated income, no credit, no employment and no
debt ratio requirement. Hard
Equity Loans are more flexible and close faster than B/C mortgages.
A "B/C" loan requires that the loan fit into a particular mortgage program so
that the loan can be sold several times as part of a “securitization.”
In What Cases Would A Borrower Need A Hard
Equity Loan?
Clients need them in the following situations:
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Tax liens
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Loss
of job
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Immigration
status
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Foreclosure
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Divorce
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Death
of borrower
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Credit
problems
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Business
failure
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Bankruptcy
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Other
situations
These items are the predominate reasons that a Hard Equity Loan will solve a
client’s current financial situation. Generally,
a borrower in one or more of the above situations is a good candidate for a
Hard Equity mortgage loan. The
three primary reasons for foreclosures and credit problems are divorce, death
of a borrower and loss of a job.
What About A Borrower Who Just Wants Money
Quickly?
A Hard Equity Loan is appropriate for a borrower who just needs money quickly.
If a borrower has an opportunity that cannot wait for an approval from a
traditional lender then a Hard Equity Loan maybe appropriate.
What Are The Terms Of A Hard Equity
Loan?
AFC’s standard loan is for thirty (30) years with no balloon; however, in many
cases this can be adjusted to fix your borrower’s needs. There are fixed and
adjustable rate mortgages available.
AFC does not originate HOEPA (Section32) loans.
What Is The Maximum Loan To Value Of A Hard
Equity Loan?
Generally, we lend up to 65 to 70 percent loan-to-value on an owner occupied
residential property. The loan-to-value may be reduced for other types of
property. Other types of real
property include nonowner occupied real property, vacant residential real
property, vacant land and commercial real property.
Usually, loan-to-values up to 50 percent are available on commercial real
property. For vacant land, the
maximum loan-to-value varies from 30 percent to 50 percent.
What Documents Do I Need To Send Receive A
Quote?
To get a quote for a Hard Equity Loan, AFC will need only the address of the
subject property, an estimate of the property’s value and the loan amount
request. To submit a loan,
Click here.
What Documents Do I Need To Close A Loan?
To close a Hard Equity Loan you will generally need the following documents:
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Signed
Form 1003 (needed for name, address, phone numbers)
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Signed
Good Faith Estimate
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Signed
Mortgage Brokerage Agreement
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Proper
Federal and Florida disclosures (RESPA, HOEPA, F.S. 494, etc.)
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Real
estate appraisal, if required
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Payoffs,
if required
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Title
insurance
How Much Processing Is There?
The only processing is:
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Endorsing
of insurance(s) (hazard, flood, wind) to new lender
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Obtaining
payoff(s) or verification(s) of superior lien(s) and/or mortgage(s)
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Ordering
real estate appraisal, if required
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Ordering
title insurance policy
Are Debt Ratios Calculated?
No! Since sufficient equity is the basis of the loan, debt ratios are never
calculated. This assumes that
HOEPA does not apply.
Is Income Or Employment Verified?
No! Since
the loan is based on sufficient equity, income and employment are not verified.
How Long Does It Take?
We close immediately after the appraisal and title work are done.
What Are Some Ways To Find Mortgages?
Direct mail, yellow pages and newspaper advertisements are some of the popular
ways to attract business. The most
productive and least expensive way is referrals from other professionals, your
vendors and your “sphere of influence.”
Can A Hard Equity Loan Be A First, Second or
Third Mortgage?
We only fund First Mortgages.
Why Should I Add Hard Equity Mortgage
Brokering To My Product Mix?
If your borrower does not qualify for a conventional loan
then these can be shifted to a Hard Equity Loan.
Right now, your competition may be brokering a Hard Equity Loan!
Processing a Hard Equity Loan is much simpler than processing a traditional
mortgage.
How Do I Increase My Hard Equity Brokerage
Business?
1. Call and speak with one of our knowledgeable account executives at (954)
384-4557. Talk with us regarding our current terms, conditions and rates.
2. Set up procedures today so that all your turned down loans are analyzed as
potential Hard Equity Loans. This includes loans that are turned down
immediately by your mortgage employees, loans that are turned down by your
lenders and loans that go "bust" at the closing table.
3. Let your mortgage colleagues know that you are now doing Hard Equity Loans.
Your mortgage associates may be able to introduce you to a Hard Equity Lender
in your area.
4. Continue with your successful advertisements whether it is the yellow pages,
newspapers, community papers, radio, television or direct mail. In your future
advertisements indicate that you do Hard Equity Lending. Each community
addresses this differently, so study ads from your area to see how a Hard
Equity Loan is addressed. Examples include, “Hard Equity Loans”, “bad credit -
OK”, “bankruptcies - OK”, “no credit - OK”, and “no credit turndowns.”
What is your insurance loss payee clause?
The loss payee clause is:
Approved Financial Corporation
c/o Consumer Asset Management, Inc.
PO
Box 013511
Miami
,
FL
33101-3511
If I am a borrower where do I make my
payments?
Please send your payments to:
Approved Financial Corporation, ISOAA
c/o Consumer Asset Management, Inc.
PO
Box 013511
Miami
,
FL
33101-3511
You can see other payment options at:
www.consumerasset.com/Payment_Options.htm
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