Private mortgage or hard money

[monkatom]

Can someone explain these and what you need to get one? I just found out that my chances of getting an FHA loan next year like I thought are shot.
I should hopefully have 60K or so in bank with middle Fico in the low 700's only debt is 170 a month student loan and income of about 135K a year.
Thanks

BTW i called 5 local credit unions and they all use Sallie guidelines so not sure if I can get a loan from a bank or??

[fltoo]

Don't understand what you mean by credit unions using Sallie guidelines.

But, hard money loans are rough. In this market, I imagine they would be extremely hard to get with the unstable housing market.

Hard money loans are usually made by private investors, LTV is something like 60% using the house as collateral and with high rates. The investor lends money knowing that they could get rid of the house in a "quick sale" if you default and recoup their money.

So, you can see why they would be hard to get if the investor cannot be sure that the house is not going to depreciate any more.

If you mean "private" loan as in the seller holding paper, the seller simply becomes the mortgagor and if you, the mortgagee, defaults, the owner can take the house back.

Just wondering, why the hurry when you can get a conforming loan when your credit improves? You have a good salary and I honestly see another year before housing stabilizes and then I think it will remain flat for quite awhile.

[fltoo]

Did some checking in my area. Most of these loans have dried up. And, sorry,I reversed that typing too fast, the seller is the mortgagee in a private loan.

[HHM]

Correct

Hard Money Lenders tend to be individuals or small investment groups; but fltoo is right, they require very low LTV and charge much higher interest rates and often want shorter terms. For the average person, these loans are unrealistic.

Private Mortgages can be either Hard Money Lenders or Seller Financing. Basically, "Private" mortgage is the broad category for any non-traditional lendering source.

It would be nice to see seller financing make a bit of a comeback, if you really think about, the only people that can buy a house right are people with excellent credit and money, so there really is low risk to the seller...and as I have been finding out in my home search, is a way to test the unrealistic asking asking prices many people have on their homes.

[monkatom]

The reason we are in the rush is because the house has not been foreclosed we have not even got the NOD. So if it is foreclosed in say a year then we have to wait three more years for an FHA loan so 4 years from now. Not sure how the market will be in 4 years so we were hoping to appply for a loan in about 18 months but if I have to pay interest through the roof I will wait.
Thanks