Q. What type of products do you offer? A. For residential loans over 2 million we offer a LIBOR plus 1.75% - 2%, a 5yr ARM-I/O, and a 10yr ARM I/O, this product is NOT credit driven, and often comes with a 1 year Pre payment of 6 months of interest.
Q. How do we lock a rate with an interest rate swap? The swap is a derivative traded over the counter. (Bank to Bank) When the borrower elects to participate in locking his rate he will enter into this trade. Now, the borrower is hedged against rising interest rate, he also becomes the counter parties hedge in the event that rates go down, thus locking in the borrowers rate and payment for the term.
Q. What type of Borrowers Qualify ? A. Our focus is on high net worth borrowers. If the borrower has good income, and can show cash flow in the personal or business tax returns as well as show post closing reserves, we would consider a loan. We are also very observant of the borrower's occupation, keeping in mind certain businesses carry certain risks to lending. For example, we will have a harder time with a borrower that is a home builder or realtor, vs. a professional ball player or business person with a history of wealth building. Also, your conventional self employed stated borrower is a fit for us here. We don't do loans as stated, but as a cash flow against the business. For example, the borrower that has a 5 million loan request and 100k per year personal income, that works for us. We cash flow the business to service the debt, most of the very high net worth borrowers use the same accounting practice which we are very familiar with. Also note, that all of the loans are stress tested based on cash flow and or AGI.
Q. What states does the programs cover ? A. This program is nationwide, Alaska and Hawaii also.
Q. What type of rates? A. This program is nothing like conventional lending, there is no matrix that will help fit a borrower in a box. The rate really depends on the borrower's profile which is derived from the CIS form in the downloads section. Rates start at 1.75% interest only for any term the borrower selects.
Q. What are your closing costs? A. Costs are our fee (.5% to 2% ). Plus the standard closing and title costs.
Q. What are the turn times ? A. Some of the borrowers are very complex, if you have a straight and simple borrower with documented income, and w-2'd etc.; that's easy, 30 to 45 days would be on the high side. If you have the self employed borrower that has 10 or 20 different corporate filings per year, we would need to take the time to find the cash flow from the various businesses and this would take more like 90 days. Also, a lot depends on the delay caused by the borrower or his staff in getting us additional information that is needed.
Q. Are there any up front fees ? A. Never
Q. Loan sizes, min and max ? A. We don't have a max but we would like to see 2 million and up in a loan amount. We will review smaller deals if they are clean.
Q. Issuing an LOI ? A. We don't use the LOI any more, we have bypassed that by simply getting on the phone with the borrower. We were spending too much time writing letters and not getting deals submitted. The process we have now is much tighter and benefits everyone without wasting time.
Q. Do you order the appraisal? A. We do order the appraisal on loans over 2 million and it may be required to order two appraisals for the higher loan amounts. However, we will use your existing appraisal to submit.
