The costs that a money lender requires from an investor
If you have ever lost your source of income and gone through processes such as filing for bankruptcy, foreclosure and anything else that affects FICO scores, you probably understand the frustration of trying to access credit and being stonewalled by all formal financial institutions. The problem is that not many people in this situation understand that it is still possible to access credit and turn around their financial crisis. However, it is important to understand all the costs involved in the process. Here are a few of the costs that a money lender will require you as an investor to meet.
If you have a loan that is not being serviced from your pockets, you will need the help of a PML in servicing it. The fee accrued for the servicing process varies a lot from one provider to the next. There are however situations whereby the loan is priced at a flat rate. For instance, the PML could stipulate that the servicing fee will be $50 dollars per month. In addition to this fee, there will also be other costs such as loan modifications, foreclosures, forbearances and other related costs.
There are certain times when you as an investor will be needed to advance funds in order to protect a loan investment. This mainly happens when the borrower does not meet the requirement of paying something that is part of a promissory note. The common types of advances include:
- Reinstating a senior lender after a default.
- Payment of delinquent property taxes.
- Insurance coverage lapses etc.
The fact about the loans are that technically, advances are not a cost to you because they can be recovered. However, you will need to have money beforehand in order to give the cash advance. The ability to recover the money given out as an advance depends on the value of the equity that protects your loan investment.
If you are dealing with an investor and they breach the agreement, you as the investor will be needed to pay the cost of foreclosure. The process of foreclosure does involve a lot of charges. These include:
- Legal fees
- Fees to a trustee or sheriff
- Recording and statutory fees
Normally, the promissory note requires that the advance fee to foreclose to be added to the balance of the debt. The probability of collecting depends on the value of the property compared to the debt that has been incurred.
Legal and advisory fees
When the note negotiation is taking place, you will be charged by your attorney. However, when the transaction is simple, we as the PML will take care of the entire processing of the document meaning that legal fees will not be a cost to you. For proceedings that are more complex, you will be needed to hire a legal team and pay them for the services.To Know maore about equity loans visit us on yelp.