Private Money Loans- MMM S2E9

Let’s talk about private money loans and what are the benefits and disadvantages that they may have.

These loans are backed by the value of the property and since the property itself is used as the only protection against default by the borrower, hard money loans have usually lower loan-to-value (LTV) ratios than traditional loans.

We need to keep in mind that private money loans are not made by banks, but by individuals who are probably aiming to make some business. Who is their target? People who are looking for short term financing and borrowers with poor credit but great equity in their property.

In Real Estate it’s very common the case of property flippers who get properties with private money loans, renovate them and resell them in a short period of time for a price that pays off the loan easily.

When it comes to apply for a Private Money Loan, it can be much quicker than with traditional loans, as private investors who back the loan usually make faster decisions than banks based on the value of the property. Lenders love these type of loans, as it’s a win-win for them. In case the borrowers defaults, there may be a better opportunity to resell a property. They don’t need to be afraid about not receiving their payment.

Private money lenders might not use traditional underwriting process, which can allow for adjustments to be negotiated regarding the repayment schedule for the loan. This could afford the borrower more opportunities to pay back the loan during the window of time available to them.

The costs of hard money loans to the borrower are traditionally higher compared with financing available through banks or government lending programs. The increased cost is a tradeoff for faster access to capital, less stringent approval process and the higher risk that the lender is taking by offering up the financing.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Home possible and home ready programs- MMM S2E7


In addition to having similar names, HomeReady and Home Possible are two of the most popular low down payment mortgage programs. Both programs offer unique features that improve your ability to qualify for a mortgage. They also  share the common goal of making homeownership more achievable for borrowers with lower income and less resources.

One of the unique elements of the HomeReady program is that it allows borrowers to qualify using non-traditional income sources. Borrowers can include income from a non-occupant co-borrower, such as a parent, rental income from boarders and income from a non-borrower household member to help qualify for the loan. The ability to use these additional income sources is a key differentiator compared to other mortgage programs.

The program also permits the use of non-traditional credit profiles for borrowers with a limited credit history or no credit score. If you are a borrower with higher credit score you may have the option of paying a lower mortgage rate and potentially reduced private mortgage insurance (PMI) fees relative to standard loan programs. HomeReady applies more flexible qualification guidelines to enable more borrowers to participate in the program.

The Home Possible program also enables borrowers to incorporate non-traditional income sources in their loan application. Applicants can include rental income from boarders as well as income from the units in a multifamily property that you do not occupy. This feature is especially helpful for multi-generational families where the children may live in one unit of a property and the parents live in another unit.

Another great point to pick  the Home Possible program is that borrowers with lower incomes and borrowers that purchase properties in designated low income census tracts may pay a lower mortgage rate.

Both HomeReady and Home Possible  programs enable you to purchase a single family home with a 3% down payment and no minimum borrower financial contribution.

Home Possible and HomeReady mortgages are provided by traditional lenders including national, regional and local banks, mortgage brokers and credit unions. In Sean La Rue Home Loans we recommend that you compare the loan terms and eligibility guidelines for both programs to find the mortgage that is right for you.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Fee land vs lease land- WW S2 E2


What’s a fee land?

A fee land is a form of freehold ownership where real estate and land can be owned in common law countries. When it comes to the fee land owner’s rights, we need to know that they are limited by government powers as well as by certain encumbrances or conditions in the deed.

What’s a lease land?

A lease land allows you to use a piece of land owned by the landlord in exchange for rent. We see often land leases being used for commercial purposes, as they are usually vacant and the tenant can build a structure that will stay temporarily or permanently.

Lease Land vs. Fee Land

The main difference between buying land and leasing is that by going with leasing you reduce the cost of a home compared to a Fee Land, which you own.   So, by owning on leased land, the homeowner gets the use of the land without spending a certain amount of capital, which will allow to afford a larger home for less money.  

However, keep in mind that you won’t technically own a home until the loan is paid off.

Good luck, and I hope you enjoy your new home for many years to come.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Occupancy for Loans- S2 E2 MMM


Welcome to a new article in seanloans.com!

Let’s dive in today’s topic: occupancy for loans.

When applying for a loan it is necessary to determine the borrower’s ability and willingness to repay a loan in accordance with its terms and to determine if the subject property provides and maintains sufficient value to regain the investment.

A loan’s occupancy type indicates the occupancy status of the mortgaged property.

Property Type
  • Investment – Indicates that the borrower does have the property for personal use and most likely offers the property for rental.
  • Primary Residence – usage property type where the borrower lives in the property.
  • Vacation Home/ Second Home – Here the borrower maintains the property for personal use and does not offer the property for rental.

    Let’s go more in depth about these 3 property types based on the usage

Investment Properties

If a home is used as a rental property, which you earn income from, it’s considered an investment property. Any type of property, such as single-family homes, multi-unit properties or condos, can be an investment property. If you simply act as the owner and landlord of a rental home, it’s considered non-owner occupied. However, if you physically live at the property, it’s classified as owner-occupied. This type of situation can occur if you own a multi-unit home such as a duplex — you live on one side, and your tenant lives on the other.

Primary Residence

We defined properties as “primary residences” when you live there for the majority of the year and you don’t ever rent it out, even during the time you’re not living there. It’s common to see that the lender asks for some legal proof that shows your intention to occupy the property.

Vacation Home/Second Home

On the vacation home, the owner usually stays in the property for just a small period of time every year. it has the same requirement than the primary residence, as it can’t be rent out to be considered a second home in the eyes of the lender.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Homeowners associations- WW S2 E1


A homeowners association (HOA) is an organization that makes and enforces rules for the properties within its jurisdiction.

HOA’s members will have to and are required to pay dues. Some associations can be very restrictive about what members can do with their properties.

Homeowners associations (HOAs) are formed by planned communities with single-family homes or multiple units, such as condominiums.

There are actually certain properties that require becoming a Home Association member in order to purchase them An HOA is typically established to make and enforce rules regarding the properties within the jurisdiction. Most HOAs are incorporated and thus subject to state laws.

Homeowners associations can also have significant legal power over the property owners in their jurisdiction. There will be a set of rules in a document called the Declaration of Covenants, Conditions and Restrictions (CC&Rs), which set certain conditions on owners and their properties. The conditions may include structural restrictions such as the type of fences or landscape allowed, or minor selections such as the color of paint on a house. This document should also outline the penalties for violating the CC&Rs, which may include fees, forced compliance or in some cases, litigation.

HOAs collect monthly association fees or annual dues to pay for upkeep of common areas like parks, tennis courts, elevators and swimming pools. Typical HOA fees are between $200 to $400 per month. HOA fees often contribute to the association’s reserve fund, which is set aside for major renovation projects or emergency use. An HOA’s board of governors is usually responsible for the organization’s finances, including the management of funds.

Advantages of an HOA

HOA members generally aim to maintain a standard of appearance for the property, and the HOA provides the regulations and guidelines for the community. The community standards should support stable property values. There are architectural standards that are designed to keep a uniform appearance to the property. Some HOA fees cover the cost of trash collection and snow removal.

Disadvantages of an HOA

The big downside of being part of an HOA is the high cost of the association fees. HOAs can also be very strict and restrict homeowners from making changes in their own properties.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Using credit cards while in escrow-Good or Bad?- MMM S1E13

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When people are buying a house, selling another house or making a major move, they usually tend to have unusual expenses, which in Sean La Rue Home Loans we do not recommend. Let’s see why in this article!


These people may normally spend only a few hundred dollars a month on their credit cards, perhaps even paying it off by the end of every billing cycle. However, when their credit score needs to look its best, they start to spend much more than a few hundred with their credit cards on furniture, moving expenses, home repairs,etc..

Some find it very unfair when their lender tells them that they have a high debt ratio on their credit story, but what we need to keep in mind is that the balance is reported at a specific time, so even if we pay off our debt every month, our credit score may be highly affected if we just spent some thousands all of a sudden for our new home.

What’s our piece of advice?

The common mistake is to think that once the credit reports have been pulled out, we can start spending on stuff for our future home because what’s the matter of buying furniture before closing on a property? Well, let me tell you It is actually a big matter, as it can make a big difference that can result in you losing the house of your dreams.


In Sean La Rue Home Loans we can tell you that when you are in the final stages of getting a mortgage, it’s a good idea to stop using your credit cards, or at least cut way back on credit card spending. Pick out the furniture, but don’t buy it yet. If you do buy a large item, consider paying down your card immediately online, so you’re not caught with a high balance just on the day your bank reports to the credit bureaus.

Good luck, and I hope you enjoy your new home for many years to come.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Trusts and Wills- WW S1 E12

Featured


Welcome to a new episode of Woke Wednesdays in Real Estate, where we’ll discuss the terms “will and “trust” as they’re often confused. One main difference between a will and a trust is that a will goes into effect only after you die, while a trust takes effect as soon as you create it.

When it comes to trusts, there are many types but it’s also important to address the issues that you may have to encounter in your estate plan.

We are going to divide trusts in 3 categories: revocable living trusts, Irrevocable living trusts and testamentary trusts.

1- Revocable trusts are those where someone creates the trust and funds his property into it. The trust’s terms can be changed during the individual’s lifetime.

2- Irrevocable trusts are pretty much the opposite, as once they are created they stay forever. It works basically this way: when you fund an irrevocable trust you place the property into the hands of someone else you’ve chosen as trustee. Once you’ve made this decision and created an irrevocable trust, you can’t take it back.

Why do people go for irrevocable trusts then? Well they bring in many great benefits such as very interesting tax implications that are worth to be taken into account and plenty of other benefits that anyone with great financial situation should consider.

3- Testamentary trusts: they are created by a testator and they don’t come into action till the death of the testator.

So, now you must be wondering: When do Wills and Trusts take effect?

Well, as we just mentioned, a last will and testament will be applied after the testator’s death and any living trust will come on the scene once the papers have been signed.

A will can only govern the disposition of property owned in your sole name at the time of your death, including interests you might have in property such as a tenancy in common.

A living trust can govern and distribute any property it’s been funded with. The grantor transfers his assets into it after it’s formed.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/