First Capital Trust Deeds is starting to do more lower priced investment property loan programs for real estate investors looking to either cash-out their equity or refinance out of their expensive hard money purchase loan. They want to go into a longer term and lower priced mortgage now that the property has been stabilized (renovated/tenant in place/cash flowing).
This was the case for the owners of this Stockton investment property. The buyers paid cash to acquire the house and once a tenant was in place, they used the rental income to show ability to debt service the monthly payments on a $100,000 loan. They were able to get the loan without having to verify income and assets.
Back in the old days of 2003-2007, that was called a “Stated Stated Loan” (stated income, stated assets). Those old loans are coming back but they are much more conservatively priced and underwritten. These loans look more like the subprime loans from 2001-2002, which were well underwritten rather than the reckless subprime underwriting loans witnessed from 2005-2007.
7/1 ARM Investment Property Loan Terms:
- $100,000 Loan Amount – 30% Loan-to-Value (LTV)
- 6.99% Fixed Rate For 7 Years
- $664/Monthly Payment
- 7/1 ARM
- 30-Year Amortization
- No Prepayment Penalty
- “Stated Stated” Underwriting