With every instance, the call-center loan-officer did a perfunctory “pre-qualification” without doing a full pre-approval, and transactions blew up as a result.
The call-center loan officers are trained largely for sales and not for loan-expertise. And, as a result they are simply unable to spot many potential issues.
We have a purchase right now in fact that blew up at a huge online lender b/c the loan officer did not understand how to account for IRA withdrawals.
HELOCs FOR BRIDGE LOANS – AGAIN, BUT BETTER THIS TIME!
A bridge loan is a temporary loan against a “departing residence” that homeowners obtain prior to selling it.
Bridge loan funds are used either to improve the departing residence (to make it more marketable) or for down payment funds that will allow homeowners to buy a new home before selling their current home.
We have been touting Home Equity Lines of Credit (HELOCs) as much better alternatives to bridge loans for years now.
We like HELOCs instead of bridge loans b/c they are often far cheaper and easier to obtain.
Since the COVID-19 crisis, traditional bridge loan financing has become even more expensive and difficult to obtain.
A problem for us though was that many of our HELOC sources had long turn-times and poor service in general.
Fortunately, we have solved that problem by finding a new, extremely reliable HELOC source with turn-times as short as two weeks for responsive borrowers.
In addition, this HELOC lender allows borrowers to be entirely upfront about their intentions of selling the home that is securing their HELOC.
The HELOCs are tied to Prime Rate (currently 3.25%) with a typical margin of about 1%.
The HELOCs are free as well, but they do have Early Closure Fees of $500 for loans up to $250,000, and $1,500 for loans from $250,001 to $500,000.
