First Capital Trust Deeds closed this Tacoma Washington Owner Occupied Purchase$2,400,000 Loan at 80% loan-to-value (LTV).
Since mid-2017, FCTD has started working with so-called “Non-QM” lenders, which stands for “non-Qualified Mortgage” lenders. Non-QM essentially means that private loan securitization has finally returned to the mortgage market and that we have more options for our borrower clients beyond the normal private money and hard money loans that we’ve been originating for the past six years. These loans are sold into the secondary market to private investors like we saw in the credit cycle that ended in 2008 rather than guaranteed or insured by various government entities (Fannie, Freddie, FHA, VA, etc).
In this case, the borrower was referred to FCTD by another mortgage broker whose options would have been a $2,400,000 loan at 12.00% interest-only on a 6-9 month bridge loan. Doing the math – that comes out to a $24,000/mo payment plus taxes, insurance, and maintenance. Plus, there is the daunting task of obtaining permanent financing, which isn’t easy to do with high leverage at 80% LTV, steep monthly payments, and even steeper extension or exit fees.
To close this Tacoma Washington owner-occupied purchase loan, FCTD worked around the clock with the borrower, lender, Realtors, and escrow officer to get the loan done on-time (after an extension or two).
Non-QM loans are great alternatives to private money financing, but they require a lot of extra work to see it through to completion. However, for the difference in pricing (rate, points, fees, etc), it’s a great option to provide for borrowers who fall just outside the narrow box of bank lending parameters, giving them an affordable loan before they refinance into a long-term bank loan program.