Mortgage loan needed..
Question: I am looking to secure a mortgage loan for an investment property, but am having several problems.
First of all is my past credit. I have a credit score of about 540, due to late payments and charge-offs in the past. Never having had any personal finance courses or teaching, I fell into the credit trap that so many Americans do. I have finally gotten a clue, have set up a solution, and am on my way to improving this. However it will be a slow process and in the mean time I need to start investing now.
Second problem is the size and type of the loan I need. Because it is below $30k, and is an investment or commercial loan, no wants to talk to me. Lenders in the Pittsburgh, PA area all seem to want at least $30,000 borrowed, and won’t consider a smaller loan.
I am looking for a private investor that is willing to give me a chance and loan me $20,000 for investing in real estate. I would consider most terms given to me, and would expect to give a fairly high interest rate. The loan period would be pretty short, as once I secured the property and rehabbed it, then reappraised it, I would be refinancing to pull out some equity for further rehab, and more properties.
If you are brave enough to consider this request, please contact me! I really need to get this family out of financial trouble and into the lifestyle we deserve. I am willing to work hard to do it, and have spent the last year educating myself in personal finance, RE investing, and business, and am now at the point where more reading would just be wasting time and hiding from the job ahead, rather than gaining more education.
Answer: It’s not surprising that nobody will lend. Whatever your good intentions, the risk is greater than anybody acting rationally would be willing to take.
Statistically (because nobody, least of all for a $20,000 loan) is going to judge your personal life and your personality, the chances of your filing bankruptcy and wiping off the loan are great. If you got a second (or third) mortgage, then it could be crammed down in a Chapter 13.
I’m sympathetic to your plight, but you’re going to have to do this with cash advances from credit cards or, if you’re lucky, a credit union. It doesn’t take that long to boost your credit score and get swamped with credit card applications. But be selective. You don’t want those with high fees and where the lender has the right to double your interest rate with scarcely any notice, based on perceived risk. Avoid Providian, for example, which solicits especially discharged bankruptcy debtors (knowing they can’t file bankruptcy again for 7 years) and then draws them back into debt the way a drug pusher draws a rehabilitated addict back into dependency. Back a few years ago, an ex-multimillionaire partner would conference call me day & night having 3rd party “need money” people. The drill was that the want-money folks had to get past me to get an audience with the guy that actually had the $$$. Here’s my message … there are some really really good stories out there.
However, you have no story other than “my credit is shit, but you can trust me, please fork over the $$$”. Shillhouette your story against other stories and you sound like a welfare trickster. Bottom line, absent offering a 50% LTV you have zero chance of attracting private funds.
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