A Lending Specialist can work with you to get you pre-approved BEFORE you look for a home. Based upon information you present to the Lending Specialist on the loan application, they will determine the approximate amount of money that you can borrow. You will be “pre-approved” for that loan amount. By allowing your Lending Specialist to run your credit report and verify your assets and income, your loan application can be submitted to the underwriter for a full credit approval. We can help you obtain a complete written credit approval (subject to an appraisal) before you make an offer on a home, if you desire.
The Income Ratio is your total monthly housing expense divided by your gross monthly income (before taxes). The Debt Ratio is your total monthly housing expense PLUS any recurring debts (i.e. monthly credit card minimum payment, car payments, or other loan payments) divided by your income. Standard underwriting suggests a maximum guideline of 28% on the Income Ratio and 36% on the Debt Ratio, but these ratios can vary based on the loan program, the financial strength of the borrower, and the down payment.
Cash Reserves are the funds you have remaining after your loan funds. The normal requirement could be monies equal to 2 months of the mortgage payment. The amount of Cash Reserves varies by loan program, but larger reserves are a strong compensating factor.
Of the 140 different investors that we have lending relationships with, there are many that will allow us to structure financing by minimizing the down payment and financing 100% of the purchase price. ZeusLending provides you the lowest closing costs. We are firm believers in delivering financing that allows you to minimize your closing costs. ZeusLending will take the necessary time to create clarity in regards to your financial goals and objectives and use this information to structure the most advantageous financing.
Mortgage Insurance insures lenders in the event of a borrower’s foreclosure. It is paid for by the borrower, and allows lenders to grant loans that they otherwise would not be able to consider. Depending on credit scores and loan structure, mortgage insurance may be required when the down payment is less than 20%.
VA loans, guaranteed by the Veteran’s Administration, are for veterans who meet certain criteria. VA loans do not require any down payment and in some cases the seller may be willing to pay all or part of the closing costs. This allows the veteran to purchase a home with little or no money down. To find out if you qualify for a VA loan, ask your Lending Specialist for an 1880 form for you to complete. After you have completed this form, take it and your discharge papers (or DD214) to your local VA office to determine your eligibility. Active military personnel may also be eligible for a VA loan.
If you do not have enough established credit, your Lending Specialist can work with you to document alternate credit information. If you have been renting, we can obtain a rental rating from your landlord as a way of verifying your payment history. Or, we can contact your utility companies, phone service, cable companies or car insurance carrier to obtain a rating on your payment history. Not all loan programs accept alternative documentation on your credit. However, there are both government and conventional programs that accept this type of payment history to establish credit qualifications.
Your credit payment history is an indication of the likelihood that you will repay the loan. Therefore, a good credit history is important, but a perfect credit history is not. Credit counseling agencies specialize in meeting with clients and reviewing your credit history. If you have any outstanding credit obligations that need to be dealt with, the credit agency can work with you and help you arrange to pay any outstanding debts that you may have. First time home buyers can also attend seminars that go through the home purchasing process and requirements with you.
A new job can work in your favor when you apply for your loan. Loan program guidelines look for a 2-year job history in the same field, but a job change for a better position is looked on favorably. If you are a recent college graduate, you may be able to obtain a loan even though you don’t have a 2-year work history.
Loan to value (LTV) is the loan amount divided by the lesser of the sales price or appraised value. For example, if you are paying 15% of the total cost of the home as a down payment, you would only be borrowing 85% of the total sales price from the lender. Therefore, your LTV would be 85%.
A Lending Specialist can “lock-in” the interest rate quoted over the telephone during their pre-qualification interview with you. We provide you a written Interest Rate and Price Determination Agreement which details the interest rate and terms of the loan you requested, as well as the period of time the rate is locked. This may vary between 10 days and 60 days depending upon your projected closing date.
An 80/10/10 is an 80% first lien, a 10% second lien and a 10% down payment. The 80/10/10 structure allows for 90% financing without mortgage insurance. When a borrower chooses to put less than 20% down for a down payment, he may either split the loan amount into two liens (80/10/10 for example), or he may opt to have one 90% lien and pay mortgage insurance. In the same manner, an 80/15/5 is an 80% first lien, a 15% second lien and a 5% down payment.
The closing will take place at the title company. Each borrower will need to bring a valid driver’s license the day of closing. The funds due at closing must be in the form of either a cashier’s check made out to the title company or a wire transfer. You may write a personal check up to $1,500.
It is your responsibility to secure homeowner’s insurance on the home you are purchasing prior to closing. The minimum dwelling coverage required is the lesser of either: a) The total combined loan amount or b) The replacement cost on the appraisal.
Because you may begin shopping for homeowner’s insurance before the appraisal is in, it may be necessary to begin gathering quotes with a minimum dwelling coverage of the combined loan amount. You will be notified of the replacement cost once your appraisal is in.
The Annual Percentage Rate (APR) is the cost of your credit expressed as an annual interest rate. Points and other prepaid finance charges are factored into the APR to show the true yield on the loan, which is why the APR is often higher than your note rate. The APR can be compared to the APR on other loan programs to give you a consistent means of comparing rates and programs.
A loan which has an interest rate that remains constant throughout the life of the loan, usually available for 30 or 15 years, or even for 20 or 40 years, depending on the lender.
A fixed rate loan that is amortized over a 30-year period but becomes due and payable at the end of a certain term (5, 6, 7, or 10 years). The loan may be extendable or may roll over into another type of loan.
Using a real estate broker, particularly for first-time buyers, is a very good idea. There are lots of details – many of them financial – involved in home buying. A Mortgage Broker represents YOU by purchasing loans and highlighting strengths and minimizing weaknesses. A Bank or Savings and Loan represents the LENDER. Mortgage Brokers have a vast variety of programs to choose from. A bank only has one…their own. Zeus is a broker and banker so you get the best of both worlds.
There are no obligations when you apply for a loan. With ZeusLending, you incur no up-front cost.
The amount charged for services performed by the company and/or mortgage company handling the initial application and processing of the loan.
Lenders fees are fees that offset the cost of producing the loan. Different companies may refer to them by different names, such as processing fees or underwriting fees.
A discount point is paid to the lender to permanently buy down or lower an interest rate. It is usually a percentage of the loan amount. What is prepaid interest? This is the interim interest that accrues on the mortgage loan from the date of the loan closing to the beginning of the period covered by the first monthly payment. For example, if your closing date is scheduled for June 15, the first mortgage payment is due August 1st. The lender will calculate a per-day interest amount that is collected at the time of closing. This amount covers the interest accrued from June 15 to July 1.
Rates are determined by the 10-Year Treasury and other financial indicators. These rates can change daily or even more than once within the same day. The changes are based on many different economic indicators in the financial markets. To obtain current interest rate information click on RATES on our website or call us at 800-ASK-ZEUS.
You can fill out our Super-Simple Application™ on the website which takes about 2 minutes and 57 seconds, or give us a call at 800-ASK-ZEUS. The initial application interview typically takes ~30 minutes.
Typically, the prior years’ W2s, three pay stubs, and two bank statements in addition to the Purchase/Sales Agreement on the home you are buying are required. Documentation requests may vary by loan type and lender.
No. A homeowner’s inspection is generally requested by the buyer as a condition to the purchase of the home. Many home buyers, will make the purchase of their home contingent upon a homeowner’s inspection. A homeowner’s inspection should not be confused with an appraisal, which is required by most lenders to support the valuation of the home.
Typically, yes. There is a cost to process any new loan application. This cost may include fees paid to third parties, such as the appraisal provider and the title and closing providers. In most cases, these costs can be rolled into your new loan; so you are not out of pocket any money. Moreover, your payment usually decreases.
Many lenders can facilitate closing 2 to 3 weeks after you have agreed on a purchase/sales agreement for a home. If you need more time, you can take as long as you need while still closing prior to any rate lock expiration dates. Many lenders require 30-60 days from purchase contract and application to closing.
Private mortgage insurance (PMI) is insurance written by a private company that protects the lender from losses in the event the borrower defaults on the mortgage. Borrowers are required to pay the premium for private mortgage insurance. If you make a down payment of less than 20%, even if you have a good credit profile, lenders generally require private mortgage insurance.
Title insurance provides the lender and the buyer (if you purchase owner’s coverage) with coverage for losses resulting from specific title defects listed in the policy. In cases where land and property have changed hands over time, there is always the possibility an error has occurred. If an error has occurred, it may be that someone else may be in title to or have an interest in the property where improvements encroach on property lines, or that other similar problems exist. In these scenarios, if you do not have title insurance you could lose your investment in your home. Lenders require “lender’s coverage” to protect their investment which only protects the lender. Owner’s coverage is optional, and provides separate coverage for the borrower.
An escrow account is typically established at the time you close your mortgage loan. This account is held by the lender for the future payments of recurring items relating to the mortgaged property, such as real estate taxes and insurance premiums, as they become due. Lenders usually require you to pay an initial amount for each of those items to start the reserve account at the time of closing.
Home ownership is about feeling good. It’s a source of pride and personal satisfaction. But there are practical reasons why ownership is a good idea. The cost of the mortgage loan can be deducted from federal income and state taxes (in states with an income tax). Interest will comprise most of the monthly payment for more than half the years a home buyer pays on it, and the interest is deductible. Furthermore, property taxes paid by homeowners are deductible. Homeowners also may see the value of their homes increase as years go by.
Yes, we do this all the time. There are federal mortgage programs designed to help such customers. Many local governments have programs, too.
Sure. It may be more challenging having only one income rather than two on which to qualify for a loan, but it can be done. Once you become familiar with the process, you should pick a good real estate agent and get pre-approved for a loan. Again, there are federal and local home buying programs that can help. We can recommend some worthy real estate agents.
A good real estate agent guides you through the process and makes the experience easier. An agent will find out what’s important to you in terms of house, neighborhood, and price and look for a home that best fits the criteria. We can recommend some worthy real estate agents.
An adjustable rate mortgage is considerably different from a fixed rate mortgage. ARMs have only been around since the early 1980s. They were created to provide affordable mortgage financing in a changing economic environment.
An ARM is a mortgage where the interest rate changes at preset intervals, according to rising and falling interest rates and the economy in general. In most cases, the initial interest rate of an ARM is lower than a fixed rate mortgage. However, the interest rate on an ARM is based on a specific index (such as U.S. Treasury Securities or LIBOR). This index reflects the level of interest rates and allows the lender to match the income from your ARM payment against their costs. Monthly payments are adjusted up or down in relation to the index.
Most ARMs have caps-limits the lender puts on the amount that the interest rate or payment may change at each adjustment, as well as during the life of the mortgage. With an ARM, you typically have the benefit of lower initial rates for the first year of the loan. Plus, if interest rates drop and you want to take advantage of a lower rate, you may not have to refinance as you would with a fixed rate mortgage. An ARM may be especially advantageous if you plan to move after a short period of time.
As a relatively new phenomena, the purpose of an ARM is often misunderstood. If you’re interested in hearing how an ARM might be right for you then give us a call and we can walk you through various scenarios.
LIBOR is the London Interbank Offered Rate. It’s similar to our fed funds rate and represents the rate at which banks are willing to loan each other reserves. Unlike fed funds, which represents the rate on an overnight loan between banks, LIBOR is quoted for specific maturities. The LIBOR is a common index for Adjustable Rate Mortgages (ARMs).
A FICO score is a credit score developed by Fair, Isaac & Co. Credit scoring is a method of determining the likelihood that credit users will pay their bills. Fair, Isaac & Co. began its pioneering work with credit scoring in the late 1950s. Since then, scoring is widely accepted by lenders as a reliable means of credit evaluation. A credit score attempts to condense a borrower’s credit history into a single number. Fair, Isaac & Co. and the credit bureaus do not reveal how these scores are computed. The Federal Trade Commission has ruled this to be acceptable.
Fix and Flip as well as Fix and Hold real estate investors in Houston, Dallas and other major cities look for ugly houses that need repairs. They can use hard money rehab loans to purchase the property and fund the rehab with their new loans.
Fix and Flip Lenders in Houston, Dallas and other cities provide funding for flippers, wholesalers, rehabbers, and fix and flip real estate investors. A Fix and Flip Lender provides the purchase price of the property and the rehab costs to fix up the property all based on the After Repaired Value (ARV) of the home.
A loan using a hard (real estate) asset as collateral is what is known as hard money or a hard money loan. Hard money lending is popular with real estate investors who want to rehab, fix and flip, fix and hold or be a landlord. Is there a difference between Hard Money, Bridge Loans, and Private Money? There are multiple differences between hard money, bridge loans, and private money. The key differences are the terms (interest rate and fees), the flexibility, and the reliability.
If you’re purchasing your first real estate investment property, then using hard money will provide you the cheapest interest rate and fees with the most reliability. If you’re a first-time real estate investor who wants to rehab, flip, or fix and flip, or be a landlord, it might be best to work with a reputable hard money lender like ZeusLending who can help guide you through the process from purchase to rehab to sale.
Being a flipper of houses as a real estate investor can be very profitable. Starting as a beginner has special challenges. Use the following tips to help guide you into a successfully closed and profitable transaction.
How and when to use hard money lending for your real estate investment is based on five main factors.
Crowdfunding for real estate investors is a fast-growing segment of financing. Similar to peer-to-peer lending and private lending, crowdfunding for new and experienced real estate investors offers a non-traditional financing option for rehabbers, fix and flip, and buy and hold investors, including landlords. The benefits of crowdfunding for real estate investors include:
Hard money loans are available for real estate wholesalers. Wholesalers often use hard money loans to fund their own deals. Also, real estate wholesalers will investigate hard money, bridge loans, and fix and flip loans because they want to give options to their buyers. Wholesalers typically assign or sell the property contract to a buyer who either pays cash or borrows money from a hard money lender.
Obtaining a zero money down or no money down hard money loan is not as difficult as it sounds. Many real estate investors think finding a zero money down hard money loans is like finding a unicorn. A fix and flip investor or rehabber or even a buy and hold real estate investor can purchase properties using hard money loans and put absolutely no money down. You can purchase a property with no money down and then sell it for an infinite cash-on-cash rate of return. If you are a buy and hold investor or landlord, then you can use a zero money down hard money loan to purchase a property, complete a rehab, and then convert it to a long-term low-interest loan with no money out of their pocket.
Yes and no. Our clients have an average score above 700. Credit scores and credit history are great tools for assessing the likelihood of repayment, but unlike a traditional bank, we consider the following additional factors that may offset less than perfect credit:
We consider these factors before making a final determination, regardless of credit score and credit history. We do not finance solely against the property or solely against the borrower, and we take an overall common-sense approach to both.
Typically, we fund between 60% and 75% of the ARV (After Repair Value) of the subject property for existing structures. The average for construction is 50%. With a higher ARV, you may pay higher points.
You need the greater of the two: $20K or 2x the cost of repairs + closing costs.
Yes, you can use property as an asset if it is owned free and clear and is located in an area we serve.
Closing costs will include 12 months of insurance on the subject property, the first monthly payment, and about $20k or 2x the cost of repairs.
Your primary benefit is to be able to use “other people’s money” while keeping your money as free working capital. Speak to your CPA about possible tax benefits of borrowing for repairs and renovations.
No. However, if you plan to keep the property, you will need to show 6 months of reserves for the PITI (Principle Interest Taxes and Insurance) for all investment properties as well as 6 months of HOA fees for all properties. If you have more than 4 properties financed, you will also need to have a credit score above 720.
Yes. The percent of ARV will be approximately 50%. Ideally the land should be worth twice as much as the structure.
Typically, the cost of the required inspection is approximately $275. Although you may request draws as frequently as you wish, you may want to consider batching draw requests and submitting less frequently so you incur fewer charges.
Yes. If you need financing on your next purchase while waiting on the sale of your property, our Lending Specialists can help you arrange the necessary bridge funding.
Yes. Of course, it will depend on the deal itself, proper identification, and verifiable assets. ARV for foreign nationals will likely be about 50% to 60%.
Preparation and organization are the keys to Fast Track funding. To get Fast Track funding, you need to have the following in place the day you request Fast Track:
There are 2 things you need to buy property an auction if you aren’t paying cash. First, the auction needs to allow for financing by Hard Money. Second, you need a Proof of Funds letter from Zeus. Simply ask your Lending Specialist for a Proof of Funds letter for the amount you’re willing to spend on the bid. It’s that easy!
If the money you need (Acquisition Price + Repair Costs + Fees) equals or is less than the money you qualify for (Funding Amount based on the percent of the property’s appraised after repair value) you essentially get 100% of your project financed!
Our founding company, ZeusLending.com, is ranked as one of the fastest growing companies in the United States by Inc. Magazine and the Houston Business Journal. We have been working with borrowers and investors for nearly 20 years and have funded millions in offline crowdfunding transactions. Now with Zeus CrowdFunding, we are bringing that vast experience and expertise online. We’re using the latest technology, and we’re making those advantages available to even more borrowers and investors.
That rarely happens. Zeus CrowdFunding primarily funds in the first lien position between 50%-75% of the property’s “quick-sale-value” and only funds to very well or uniquely qualified borrowers. However, if a non-performing asset is acquired, it will be immediately stabilized and marketed for resale. The excess equity typically offsets the investment, return, and costs. In many cases, these resale opportunities can create additional unexpected returns. In the very rare occurrence of a shortfall, Zeus CrowdFunding uses reserves to close the transaction for guaranteed investments. Guaranteed investments guarantees the investor protection from loss of principal.
Guaranteed Investments pay a lower rate of return, but guarantee the investor protection from loss of principal. Non-Guaranteed investments pay a higher rate of return, but the principal is more at risk. That said, Zeus CrowdFunding primarily funds in the first lien position and is very thorough in their due diligence for all investments.
The investor should anticipate a 12-60 month holding period based on their selected investment. An Investor may request withdrawal of all or a portion of a Guaranteed Investment prior to maturity. Zeus Crowdfunding will use commercially reasonable efforts to accommodate the Investor’s request within 90 days of such a request. Some restrictions apply and include a processing fee of $850 per note.
Each investor is paired directly to a single borrower and a single property, and is not part of a pool. Your funds are used for a specific transaction (i.e., a specific borrower and a specific property) and your funds are never shared with other investor funds in a pool of multiple projects.
We do the investing for you, so you don’t have too. Investors who see the value in diversification, leverage, and real estate, but are not prepared or trained to locate, underwrite, and service their own private loans, align with Zeus CrowdFunding for the concierge investment experience. We underwrite and prefund every project so our investors can enjoy true semi-liquid passive returns on their investments.
Accredited investors (investors who make a minimum of $200,000 per year or have $1M in assets) can invest as little as $50,000 per project up to the total amount being funded.
There is NO CHARGE to the Z-Crowd Investors! Simply invest in the project(s) that you choose or that you have us choose for you and start earning interest payments right away!