Avatar's Blog
» Building a Hard Money Loan Package - Minimum Borro
Avatar Financial Group receives and reviews many loan requests each week. If you are purchasing property, you can demonstrate your seriousness by providing documentation indicating the existence and availability of the 20% minimum downpayment required of you as a purchaser at closing.
Avatar funds according the following equation:
100% - Total Cost of Property
65% - Avatar Financial Group Loan
20% - Minimum Cash from Borrower at Closing
15% - Subordinated loan such as a Seller-Carryback Loan or additional cash from borrower
The above equartion is a general view of how a hard money property purchase can be made. Naturally, the borrower can put up more cash than 20% and Avatar can lend less than 65% of the total cost. But the borrower should not expect to put up less than 20% or to have hard money cover more than 65%. On rare occasions and certain circumstances, even these percentages can change. However, to receive top priority in a purchase loan request, include a bank statement or other document indicating the existence of these minimum funds available for closing. Doing so shows Avatar that you are a serious investor and are ready to close.
