Non Status Loans – Get Money Without Any Checks
Non status loans are those loans which are available to those borrowers who do not have any credit history or a bad credit history. Non status loans are based on the valuation or appraisal of the property that a borrower is intending to purchase and are usually for a short duration only. These loans can carry a higher interest rate than the usual personal loan, however since they are for short duration only, borrowers are not that concerned. If they decide to hang onto the property for longer than three to six months, most borrowers will refinance and obtained a secured longer term loan with better interest rates and terms.
Borrow Secured or Unsecured Loans
The borrower can also obtain money in the secured or the unsecured form based on the valuation of the property in question. A secured non status loan will carry a lower interest rate than an unsecured status loan. Borrowers can also obtain these funds without any credit checks based on the valuation of the property that the loan is for. Many of the non status loans that do not require a credit check will be based on the value of the property and secured by the property as well to provide additional protection for the lender. The lender will claim the property and resell it if the terms of the non status secured loan are not met. They will recover their expenses plus whatever the outstanding balance is on the non status loan. If there are any additional proceeds left over these proceeds will be remitted to the borrower, however this is usually rare.
Lenders Will Only Lend up to 65%
Lenders of non status loans typically will only lend up to 65% of the value of the property. An appraisal must be completed to establish the value and then only 65% of that value will be lent to the borrower. The borrower will also be responsible for the appraisal costs along with the fees to process the loan. They must either, come up with the other 35% as a down payment, secure the remaining funds from another lender or negotiate a better deal after the valuation has been completed. Some borrowers have been known to negotiate a significant decrease in the purchase price of the property after the valuation is completed, which can lower the down payment significantly.
Using a Broker to Find a Non Status Loan
Looking for non status loans online through research is one of the best ways to find low rate deals. Some borrowers will do all of the research themselves, while others may use a broker to assist them in finding a loan with the best interest rates. Brokers are paid a finder’s fee when they bring a qualified borrower to a lender. There is generally no cost to the borrower when they use a broker to assist them in finding a lender who will lend them a non status loan based on the valuation of their property.
Brokers make it their business to be aware of the current interest rates that are available for all kinds and types of loans. They regularly talk with lenders and negotiate on behalf of their clients to obtain the best deals for their clients. Applicants can save themselves a lot of time searching for non status loans and other loans by using a broker to help them find these loans. Even more important, clients can also receive competitive quotes on interest rates for these loans by using a broker.
The broker can also assist in refinancing the initial loan if the buyer decides to keep the property for a longer period. The broker will receive another finder’s fee and usually deliver another loan that will be of a longer term and a lower interest rate. Although this is more financing than what the borrower may have originally planned this type of situation can occur in a slow real estate market were properties are not selling as fast as they usually do. The lower interest rate personal secured loan is definitely a bonus to anyone who needs to carry the property for a longer period compared to the non status loan which carries an interest rate that is higher than most personal loans.
What are Non Status Loans Used For
Many consumers and business people will purchase property that they intend to sell within a few months and certainly less than a year. They require short term financing to cover the value of the property until it is sold. If for some reason it does not sell in the time frame they planned for, usually less than twelve months, this short term non status loan would be converted into some other financial instrument, such as a long term non status loan. Speculators will typically use this type of financing.
Another type of non status loan is sometimes used for what is called bridge financing. In this situation, clients will end up owning two properties at the same time. They overlap ownership to allow them time to move furniture from one home to another or perhaps to allow time to complete repairs and renovations on the home they just purchased. They will take out a bridge loan or a non status loan to carry both homes until the original home is sold. Once the original home is sold the non status loan is repaid and a new longer term non status loan or mortgage can be arranged.
Many clients will use a broker to help them arrange these kinds of financing deals and walk them through the process. If their credit rating is not so good of they do not have a history of credit, a broker and connect them with lenders who are willing to take on what is perceived to be a higher risk situation. The interest rate may be a little higher in these situations however customers are aware that it is only for a short duration as explained earlier in this post.
Clients can use a broker to help then and find a broker through some of the online services that are offered. Compare the rates and terms for all of your offers with those that may be available from your local bank as well. Usually the banks are not as competitive, however you will have the satisfaction of knowing that your broker has in fact found the best non status loan for you.