Non-Conforming Loan FAQs
- Integrity - Clear communication of costs, including a good faith estimate.
- References and the length of time in the business.
- Support staff, which reflects the ability to execute ensuring a rapid closing/funding process.
For the past 30 years Hopkins Financial Services has been Idaho’s premier non-conforming real estate lender. We are committed to providing our clients timely and creative lending solutions.
If you are representing a buyer you can help by analyzing the cost vs. benefit. Your client, or you as a borrower, may have an opportunity to purchase a property below market value, have 30% down, and are able to service a debt payment on the loan balance at a higher interest rate, however are unable to qualify for a conventional bank loan. The opportunity of obtaining the property now may far exceed the cost of the higher loan fees. Hopkins is simply an alternative source when the benefit exceeds the higher cost and can help you create solutions that conventional sources cannot.
Most types of property including single family residences, commercial buildings, commercial bare ground and recreational property.
The loan to value requirement is determined by the location of the security, the type of security, and the repayability of the borrower. A grade “A” borrower on residential property located in Boise would have a higher loan to value (between 70% and 80%) than a grade “D” loan on a commercial bare ground in a small outlying town, such as Council (between 50% and 60%).
Generally the rate and the points are determined by non-conforming level of the loan. As the risk increases and the difficulty in placing the loan increases so do the rate and the points. Non-conforming rates and point are higher than a bank. Our interest rates can range from 8.75% to 15% and average 10% to 12%; and the points range from 2.5 - 7 points with an average of 3 - 5 points.
We frequently work with referring broker who are not able to complete the transaction with their conventional partners. We typically pay a 1/2 point on at transaction if it closes depending on the level of work the referring Broker provided.
There are many factors that determine the exact structure of the loan terms for a private money loan. The funding of our loans come from private investor(s) who anticipate a certain level of return for their investment. Thus the loan terms are a reflection of what the perceived risk is of the investment at the time of the loan. These factors include Loan to Value, location, property condition and marketability, credit score and financial strength of the borrower.
The property may be non-conforming: bare commercial ground; mobile home; lot or acreage; older home with compliance problems; residence on commercially zoned parcel of land. Borrower may not qualify: debt to income ratio too high; self-employed; new to the area; low credit score; bankruptcy. Timeliness of funding: borrower may need money so quickly they are unable to wait for conventional bank loan or MAI Appraisal .