Most of our loans are structured for the smallest monthly payment as most borrowers want to maximize their own cash flow. Our typical loans are of a short duration between 1-10 years and are Interest Only loans. Those two factors drive down the monthly payments significantly. Borrowers can be comfortable knowing their rate won’t change and they can extend the loan as long as they have an on-time payment track record for the initial loan term.
We do get creative in our financing and will entertain new loan structures that work for you. We are not a bank so we are not limited to the underwriting requirements of typical financial institutions. We hold all loans on our books so we want the best borrowers for our cash.
Cash Back Rewards
Wouldn’t it be great to get extra cash at year-end to make holiday shopping easier or to pay property taxes due in January? We offer a cash back program to reward borrowers that have a perfect on-time payment history. We’ll make an ACH deposit to your bank account equal to 5 percent of the interest paid during the 12 months of the calendar year.
Example: If your loan interest payments equal $2,000 per month and you make your January 1st through December 1st payments on time, you’ll receive a refund of $1,200 just in time for the holidays.
To make it easy for you to earn the cash back rewards, enroll in our ACH payment program to have your monthly payment pulled automatically from your bank.
Interest Only – The majority of our loans are interest-only, meaning you only make monthly payments of interest and not principal. This can bring down the monthly payment amount substantially and allow property owners to maximize their cash flow. Some have referenced these loans as a sort of leasing option, similar to a car lease, where you pay for the use of asset while you have it, but do not intend to own it forever. Equity in your property comes from market value appreciation and not principal payments on your loan.
These loans are great for:
- Those looking for the lowest monthly payment
- Properties that you do not plan to own forever
- Professional real estate investors that leverage cash to maximize their return on investment.
Standard Amortized – These are the traditional home loans with repayment terms stretching out 30 years. Monthly payments include interest and principal so you pay off the mortgage and own the property outright after 30 years. Most people end up moving at some point before the 30-year payoff and never realize the benefit of paying off the mortgage. If there’s a chance that you’ll move or sell the property before paying it off, you should evaluate paying principal as part of your monthly payments and if that is the best use of your cash.
Full Document Verification
Our loans have an optional component that allows you to voluntarily authorize us to verify your employment, income, credit and tax information. It is not required and only serves to lower your interest rate. Naturally, we are more comfortable lending our money to borrowers that allow us to verify information so we reduce the interest rate for those that authorize verification.
Escrow / Impounds
Escrow or Impounds refer to a reserve account held by the lender into which the property owner pays monthly toward the annual tax or insurance bills. Most of our loans will require Insurance and Tax impounds as part of your monthly payment. If you meet certain Loan-To-Value ratios, impounds are not required as part of your monthly payment. If you qualify to remove impounds and voluntarily enroll, we will reduce your interest rate. By impounding funds for insurance and taxes, our risks are lower so we adjust your interest rate to pass that on to you.
We prefer to build long-term relationships with borrowers because it decreases our operating costs. We want to be the preferred lending partner to professionals in the industry as well as individuals financing their first home. When you return to us for your next loan, we reduce your interest rate automatically to pass on our cost savings to you. This benefit is offered to all our borrowers and rewards our professional real estate investors that work with us on multiple projects.
Retirement Assets Invested With Us
When you move retirement investment accounts to our asset management group, we significantly reduce your interest rate. You get a 1 percent reduction in the interest rate per assets moved equal to 40 percent of loan value. Partial rate reductions are included. Investment accounts can be set up to hold the same investments you currently hold, or you can work with our advisors to set up a portfolio tailored to you.
Example: Base loan of $400,000 at 8 percent
- Move $160,000 to us, resulting loan is $400,000 at 7 percent
- Move $400,000 to us, resulting loan is $400,000 at 5.5 percent
- Move $640,000 to us, resulting loan is $400,000 at 4 percent
The retirement accounts can come from friends and family as well. This allows friends and family to help first-time, low credit, and low down payment borrowers secure the financing needed to close on a property without the risk of co-signing on a loan or lending family members cash. Investment accounts can be pulled out at any time.
Non-Retirement Assets Invested With Us
Interest Rate Impact
Moving non-retirement assets to us will lower your interest rate more than moving retirement assets. This is due to less legal work and regulations on non-retirement investment accounts. When you move non-retirement investment accounts to our asset management group, we significantly reduce your interest rate. You get a 1 percent reduction in the interest rate per assets moved equal to 20 percent of loan value. Partial rate reductions are included. Investment accounts can be set up to hold the same investments you currently hold, or you can work with our advisors to set up a portfolio tailored to you.
Example: Base loan of $400,000 at 8 percent
- Move $160,000 to us, resulting loan is $400,000 at 6 percent
- Move $400,000 to us, resulting loan is $400,000 at 3 percent
- Move $640,000 to us, resulting loan is $400,000 at 0
The non-retirement accounts can come from friends and family as well. This allows friends and family to help first-time, low credit, and low down payment borrowers secure the financing needed to close on a property without the risk of co-signing on a loan or lending family members cash. Investment accounts and assets can be pulled out at any time.
Down Payment Impact
Moving investment assets to us also allows us to lower your down-payment requirement significantly. We calculate your Loan-To-Value (LTV) ratio based on the combination of your property and investment account. Our down payment requirement is calculated as the greater of either 10 percent of the purchase price or purchase price less 70 percent of our modified LTV ratio.
Example: Property price of $400,000 plus Investments of $200,000 = combined value of $600,000. Our 70 percent LTV requirement on the property alone would require a down payment of $120,000, but only $40,000 if you move the investment assets to us. We use the greater of either 10 percent of the purchase price of $40,000 ($400,000 x 10 percent) or $-20,000 ($400,000 – (70% x $600,000)). You save $80,000 of down payment. You do not need to put down another $40,000, as it is included as part of the $200,000 assets transferred to us and is merely a change in the accounting for the loan on our books.
This is equivalent to earning 5 percent interest on your down payment amount every year whereas with standard loan programs, down payment amounts earn nothing and only directly offset the mortgage loan amount. Banks typically require down payments to reduce their risk, but we have other risk management techniques at work and are not limited to those old-school methods.
To maximize tax advantages, we utilize a mortgage interest offset account. This is a type of flexible mortgage which calculates interest on the net balance between the loan and the investment account. Not only does this lower the lifetime interest paid on your home loan, but it also can have significant tax advantages as a tax is no longer paid on interest earnings. The separate offset account arrangement also ensures that cash balances are immediately available for use if needs require.
Example: An individual earns $250,000 a year salary and has a mortgage balance on their primary residence of $600,000 with interest charged at 4.5 percent. The individual also has a $300,000 balance in a high-interest savings account earning 3.2 percent interest. The use of the offset account will make the individual $12,135 better off per year, or $364,050 over a standard 30-year mortgage. The tax savings are larger with a higher offset of both mortgage and investment.
Built-in Loan Modification Program
It’s true, sometimes we have to foreclose on a property when borrowers stop making payments. Foreclosing is a difficult process both for the borrower and the lender. We all know that during the last real estate crash, banks and others actually advised their clients to stop making loan payments to trigger a foreclosure in the hopes of forcing the bank to accept a loan modification or a short sale. Banks were not prepared for the wave of foreclosures and structuring loan modifications.
Since we keep loans on our books, we want to address the risks of “strategic defaults,” or any default for that matter. We recognize that factors outside your control can have a substantial impact on you, such as losing a job or failing health. We view the lender/borrower relationship as a partnership as borrowers need lenders capital and lenders need borrowers to invest in loans. You can’t have one without the other. If you are experiencing any hardship due to factors outside of your control, please reach out to us for assistance. Often we can structure loan modifications that will work for all parties.
To qualify for our built-in loan modification program, you must utilize our Loan Exit program and have not missed any payments. Your interest rate will drop automatically if our real estate tracking index drops by 20 percent. We utilize the Case-Schiller index to track market value trends across multiple regional markets. We will assign the most relevant regional Case-Schiller index for your property and track its performance over the life of your loan.
Other loan modifications may include an extension of the loan repayment term or deferring payments for a period of time. In all cases, we want upfront and open communications from borrowers experiencing hardships outside of their control.
Loan Exit Program and Consulting
Everyone wants to pay the least amount of interest possible. Our loan exit program tracks your financial information and automatically notifies you when you can lower your interest rate. Since we keep loans on our books and do not simply sell off the loan once it is created, we have a vested interest in your financial success.
Our loan exit program gives you access to our private financial planning system at no cost. Our web-based software can connect to your bank, brokerage, credit card, insurance, loan accounts, and more. It even connects to your employer’s payroll and benefits systems. When your accounts are connected, the system will pull all transactions from those accounts into one place to make it easy for you to manage your finances. We even build a debt elimination plan for you to cut your interest costs significantly.
Bank Level Security by 256-bit AES bank-grade encryption protects your information. Don’t worry, we don’t see the transactions or your account login information.
Property Market Value Protection
Reduce your interest rate by a full 1 percent when you participate in this program. The primary reason why homeowners default on their mortgages is because they are underwater and they owe more on the loan than the house is worth. We can fix that.
You know that homeowners insurance protects you if your home is damaged or burned down. But how do you address the risk of the property declining in value? What if your home is physically okay, but your home value decreases from market forces that you do not control?
That’s where our program kicks in.
We have the ability to offer certain products designed to protect you from dropping home values. This program is very popular for our professional real estate investors and brokers. It can also be utilized by homeowners to protect the market value of the home so you can be comfortable knowing that even in market crashes, your home value is protected.
Real estate brokers have used this product to attract many new clients. Brokers typically compete with other brokers for listings based on commission rates. So how does one broker get a competitive advantage over others when homeowners want to pay the least amount of commissions? They add this product to their pitch for the listing. By offering property market value protection, many more buyers will be comfortable stretching their budget into a higher value property, which increases the sales commission.
Many people lost their homes during the last real estate crash due to a lack of liquidity and not being able to monetize the property’s equity when they needed it. Our Property Market Value Protection is designed to generate liquid cash when your property value declines. As your property value declines in the market, the cash value of this program increases. This assures you can sell the property in all conditions as well as allowing you to tap the property’s equity during a market downturn so you can buy more real estate and capitalize on the declining values.
Property owners must be an accredited investor to participate.
Mortgage Payoff Program
Have your mortgage paid off automatically if you die or become incapacitated. Don’t leave your loved ones with the burden of trying to make mortgage payments to prevent default while suffering the loss of you. Our Mortgage Payoff program allows your loved ones to keep the property and more of your liquid assets. Your loved ones will not need to use any of your other assets to pay the mortgage and they won’t be forced to sell quickly at distressed value.
We reduce your interest rate when you voluntarily participate because you are proactively managing risks of default in unforeseen events.
Tactical Wealth Technology Solutions Loan Reporting and Information
Our loan features are unique to the industry which means we need a unique software package to track all the loan performance metrics. Our affiliated technology development company built the platform we use for operations and borrower reporting. To participate and benefit from our Cash Back Rewards, Built-in Loan Modifications, Mortgage Interest Offset accounts, Mortgage Payoff Program, and Property Value Protection loan features, you must sign-up for the Tactical Wealth Technology Solutions platform.
It is available on a subscription basis for only 7/10,000th percent (.0007 percent) of your outstanding loan balance monthly. Alternatively, you may opt for a one-time 2.5 percent upfront subscription fee that can be rolled into your mortgage.
Example 1: If your outstanding loan balance equals $200,000, then your monthly subscription fee would be $140.
Example 2: Upon closing on a property and obtaining a $200,000 loan, you can pay a one-time subscription fee of $5,000.
We are more than happy to speak with you regarding the features of our loan. When it comes to choosing high return investments, you can’t go wrong with the Tactical Wealth Fixed Income Fund.