HGRN Flow Loan – HFLO- What is that??

Hudson group realty network specializes in “DSCR” loans. All our loans are based upon the Debt Service Coverage Ratio-“the DSCR” I am going to simplify it, you take the mortgage principal and interest. The taxes on the property and the Homeowners insurance. (You take those tax and HOI numbers and divide by 12 to give us the per month)

So let’s say my mortgage payment (for principal and interest) is 1,000.00,  the taxes and insurance on the property are (taxes) 5,000.00 and (Insurance) 2,000 yearly.

You take the 7,000.00 total and divide by 12 (for months in the year) =583.33

So 1,000 plus 583.33= 1,583.33 a month.

The house that you are looking to buy,  is a 2 family and you collect 1,000 on the first floor and 1,000 on the second floor.  So that’s 2,000.00 a month.

Your house would qualify for the loan!  As long as the rents cover the payment of the mortgage.  (in this instance, the mortgage payment could go up to 2,000 a month and it would qualify)

The maximum loan to value (LTV is loan amount compared to value)  If house is worth 200k and need loan amount of 160,000.00 that would be 80% LTV (which is our maximum Loan to value)

To qualify for this loan, you would need 3 things:

  1. Credit of 680 or above
  2. Bank statements for the last 60 days showing you have the down payment and closing costs (with no large cash deposits in them)
  3. A positive attitude!

 Hope this helps explain our most popular program at HGRN!  Happy shopping

What would you do ? Three illustrations from my adventures.

The mortgage and real estate business is all about helping your fellow human. Their  desire to own their own home. This is basically the American dream for so many of us.

Let me just say this, and this is just my perspective,  “the needs of the client should always outweigh your needs as a lender or real estate professional.” 

Illustration #1  – In this instance I am the lending institution –  I have a lending competitor that has certain programs that are available to consumers directly, that are not available to me as a broker.  This does not happen often, but it is my job to know all this as a lending “professional”. When I review a clients information and I see that, this is the best way to go. I explain to them about his program.  I call my competitor and explain the situation to them, tell them the prospect would qualify for the Grants that they give to their retail clients. I would connect those two, my client would usually access to grants and assistance and things of that nature. I would  feel like I did the correct thing for the client. That’s my true win.  That’s my true measure of a professional.

Illustration #2 –  I have a client who has been looking for a house and has had no luck, they had a few deals with me fall thru due to circumstances beyond our control. They find a house on their own, I am their buyers agent, but the listing agent says they can get them a better deal if I am not involved.  (this is not ethical or professional, but I feel Karma will take of that). The client is super qualified and I want them to be happy. I tell them to go forward with the other agent and let me know when they close. Client closed and is happy, I am happy for them. That’s my win.

Illustration #3 – Multi Million dollar commercial property is in contract.  I am the selling broker.  The buyer has plans to build a hotel, but their plans get denied. Instead of telling me the truth ( I am the selling broker) They proceed to claim that there is something wrong with the property and that they want their money back.  I have done my homework and know this is totally fabricated.  I can have my client sue this buyer for lack of performance and keep their down payment. ($370,000.00) I am also entitled to my commission and can fight for it. But this would take years of legal proceedings and stress, in addition to hurting my client.

The win I negotiated was to have the buyer pay my seller for liquidated damages  of a 6 figure sum.  Let them move on, and I am now marketing the property again. My client knows that I put them first and they are eternally grateful for it. I never have to worry about this listing leaving me.

This loyalty to the client may not seem like it works out in every case, but from my perspective it does.

 Do what’s right for your client, and your phone will never stop ringing.