Private Money Luxury Home Loan In Palm Springs

Private Money Luxury Home Loan In Palm Springs

A Palm Springs area seller of a high-end home obtained a $2,100,000 private money luxury home loan while the home was staged and listed on the market, using a 12-month interest reserve payment option to service the mortgage.

Interest reserve is a fancy way of saying that the borrower and lender agreed to set aside a portion of the cash-out proceeds into an escrow account to cover the twelve monthly payments in the upcoming year. For this $2,100,000 loan at 9.99%, the monthly payments came out to be $17,325/month. Multiply that by 12 months and the total interest reserve amount came out to be $207,900, which was held by an escrow account and released on the first of every month to the loan servicing company.

The benefit to the borrower, who had moved out of the home several months prior, was that the payments would be out of site, out of mind, and accounted for while the home was listed on the market. The only expenses during the listing period were the taxes, insurance, utilities, and maintenance.

For the private money lender that issued the loan, they had the benefit of knowing that this loan yielding 9.99% would perform for the next twelve months.

Private Money Financing Terms:

  • $2,100,000 Loan Amount
  • $207,900 12-Month Interest Reserve Account
  • 24-Month Term
  • No Prepayment Penalty
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