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Charmed

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Have any of you ever tried using the Lending Club to finance a property purchase?  I found a great deal that if I pay cash, I can get it at an amazing price.  So I'm trying it out.  I can post back with my experiences in mid-February to let you all know how it goes.

Basically, it's unsecured loans that are a couple percentage points above your typical mortgage.  But in this case, good because if you need more cash than you have but it would be too small an amount to get a mortgage for.  And the rate you get is dependent on your credit.

Charmed

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Well, I posted my ad on 1/27 and on 2/3 I'm already fully funded.  My loan is under review.  A total of 210 people funded me.  I guess we'll see what's next.
Charmed

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On 2/6 the loan was approved after funding and today, 2/7 I got the money in my bank account.  So far so good.
Charmed

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On 2/11 I went with my real estate agent to look at properties because the original one I posted about fell through.

Today on 2/13 I made an offer on one of the properties.
- 2 bedrooms, 1 bath
- 1,050 square feet
- Refinished HW floors in living room, dining, and hall
- Kitchen has granite counter tops and real wood cabinets (not particle board)
- New roof in 2004
- Double lot
- 2 car garage and extra shed

I will continue posting about my journey as it progresses.

Charmed

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Today, 2/16, my offer was accepted.  Next: inspection time!  The property has to be de-winterized before the inspection can take place, so it probably won't get to be inspected until mid next week.
Charmed

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Turns out inspection is happening tomorrow, 2/18!
Charmed

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Inspection complete.  The inspector actually gave me a high-five at the end of the inspection after seeing the property and hearing what I was paying for it.  So I would say it went well!
Marytmary1978

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Interested in knowing what rate and terms you got.

Charmed

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They only have 3 year and 5 year loans I believe.  I got the 3 year loan.  It's a little higher rate, 7.9%.
PatseChi

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this sounds extremely like an ARM; what's it adjust to after the 3or5 term; 12.75%
??

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Patse
Marytmary1978

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Reply with quote  #11 

So -- do you know for sure that you will be able to refinance at a reasonable long term fixed rate prior to the end of the contract?  If not, you are treading on thin ice.

 

My advice -- get a fixed rate mortgage on it ASAP.  I understand that you may have to do some fixing etc to get it to a point that it is finance able-- do it as fast as you can and get the standard mortgage-- Why not when you can get 30 yr for around 5 to 6%??? Do NOT wait for 2 years.

Charmed

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It does not adjust to anything after 3 years -- it's a completely fixed payment.  There are no pre-payment penalties.  After 3 years it's done, nothing more to pay.  I close on the house next week Wednesday (2/29).
Marytmary1978

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If you found a place to purchase that you will have paid off in three years, you have done very well!

Charmed

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I wanted to post back after all of this with a happy ending.  I just called the new tenants and told them that they were selected.  They were so happy, they said that they just fell in love with the house and were on pins and needles waiting for my call!  Their lease begins March 15th and goes for a year.
EmeraldSkylark

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have been making weekly deposits for the past two years and am returning an annualized 16.6% with 0 defaults. The due diligence ad filter tools make it a great opportunity to invest while monitoring your risk.
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