First Capital Trust Deeds funded an owner occupied private money loan in Murrieta, California, on new construction ready for new owners.
Since we’re in the private money lending business, we’re constantly discussing with realtors, mortgage brokers, and prospective borrowers about the obstacles to securing owner occupied private money loans because of regulations and the lack of interest by trust deed investors to fund said highly regulated owner occupied loans.
And you know what? Nobody cares. Realtors, mortgage brokers, home buyers – they don’t care about all the reasons why it probably won’t happen. All they want to know is that there’s a chance that it could happen.
Which, as we write this, we’re drawn back to the classic scene from “Dumb and Dumber” when Mary Swanson lays out the odds of Lloyd Christmas getting a chance at dating her. Sometimes though, we get that “one in a million” shot at closing an owner occupied private money loan.
As was the case on this new construction single family residence in Murrieta. The buyers were moving down from Northern California and only needed a small $70,000 loan to close escrow on the $300,000 house.
This was a very low-risk loan for the trust deed investor to make since it was a brand new home, plenty of protective equity, and strong borrowers (700+ FICO scores) with a steady income. The only reason they went with private money financing is a short sale about two years prior on an investment property. Therefore, the need for a private money loan for 12-15 months.
Owner occupied private money loans that actually close nowadays look like this loan in Murrieta. They have low loan-to-value (LTV), the property is high quality, the borrowers are strong minus one credit blemish (usually a short sale), and they have a clear exit strategy to refinance into a conventional loan right at the 36 month anniversary of their short sale.
Owner Occupied Private Money Loan In Murrieta Financing Terms:
- $70,000 Loan Amount (23% LTV)
- 8.00% Interest-Only
- 36 -Month Term
- No Prepayment Penalty