Financing in Roswell>Question Details

Amirek, Home Buyer in Fayetteville, AR

My husband and I have been trying to find a local lender who will give us an asset-based mortgage. So far, we're having no luck.

Asked by Amirek, Fayetteville, AR Mon Aug 13, 2012

The lenders we've spoken with all say the same thing (even the ones we've done business with for years, still have loans with, have never defaulted on or made a late payment)...they can't help us unless it's with an ARM mortgage. What we're wanting to buy is investment property. A single-family home, which we want to use as a vacation rental. We already have one vacation rental, and it's doing very, very well. We have no debt on that home. We also have a rental that pull in very little income because my mother is renting from us, but we own the home outright. We own our own home as well, and another home that we lease for more than our mortage/insurance/tax payment. We have plenty of assets, a trust, and other sources of income that aren't from employment. My husband and I are self-employed. We pay ourselves very little, putting everything we earn back into growing our businesses. How can we can obtain an asset-based mortgage? We really hate to miss an income opportunity.

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Rodney Mason’s answer
Asset based loan programs have never been very common and today is certainly no exception to that. Those programs can be extremly risky for the lender, thus very few lenders would even consider that much of a risk today.

For those few lender who do offer an asset based program, its generally for larger loan amounts. Most are usually in the Jumbo range above $417,000. I have only heard of one that will go as low as $300,000.

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at
Licensed in Alabama & Georgia

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing
0 votes Thank Flag Link Tue Aug 14, 2012
Asset based companies are far and few between. Companies like ING, BB&T and Quicken changed to traditional lending after the stock market crashed in 2008. It's not so much the risk of losing the collateral funds rather the public relations damage of taking Mr. Smith's retirement funds for defaulting on the loan.couple that with Obama's financial reform bill and transparency and forget about it.
So, you may have to turn to private equity money (hard money) with soft rates. There are lenders who will allow you to collateralize stock funds for a mortgage loan. You have to use the company to buy it (or the trust). Fees are about 5-8%, rates between 5% to 9% interest only. Amortization up to 30 years with 5 year balloon. No pre-pay penalty. Minimum 30% down (conventional is 20% to 25%). No income check, personal credit check offers better rate, however non-recourse loans won't report against your social security number. To get started, we'll need to get you application started. There is an up front fee which is refunded at closing. We'll also teach you other ways to buy property (different programs).
0 votes Thank Flag Link Mon Aug 13, 2012
Sounds like maybe we're better off paying cash. I was hoping to use real estate as collateral--the home that is paid off. We were prepared to put down 20% in cash. Just as the banks would prefer to use stocks as collateral, we would prefer to keep our stocks handy, since they are more liquid (even though they are infinitely riskier to use as collateral than real estate, even in our current economic situation, in my opinion). We've already been offered a fairly good ARM by a local bank (4.25% interest the first 5 years, if I recall correctly, then the rates go up according to the market). We're not really wanting to go that route if we can avoid it. My husband and I both have excellent credit ratings--over 800. Another route is to obtain a commercial loan, but the interest rates are more or less what you've indicated. (Actually, more like 5-6%, since we have good standing with the bank we discussed the financing with.)
Flag Mon Aug 13, 2012
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