Westrock Capital are experienced in helping their clients obtain farm loans
that meet their individual needs. Often, a borrower is not able to obtain funding through a more traditional method, such as a bank or financial lender, in which case, Westrock Capital can help with funding through a private money mortgage.
Private money mortgages are loans which are secured by real estate made by a private lender/investor instead of a bank, lending institution or government agency. Private money mortgages loans are short-term (generally six months to two years) asset based loans made to the professional real estate investor for the purchase, rehabilitation or equity cash out of real property. Farm loans through private money mortgages often close quickly as well.
The decision to lend on a private money mortgage is based on the equity and value of the property being put up as collateral, not on the borrower’s credit. The security for the loan is based upon fact that the loan will be for no more than 65%-75% of the appraised value of the income-producing property. Non-income producing property (generally land or vacant commercial property) can expect a loan to value of no more than 55-65%. Interest rates can be expected to be considerably higher than conventional loans, usually 4-6% above prime with interest only monthly payments.
Many of Westrock’s clients are interested to learn why a private money mortgage would be of benefit. There are many reasons why one would be advantageous to a farmer. Problems in qualifying for traditional farm loans can be one reason, in cases where the borrower and/or the income of the property do not qualify for a traditional mortgage loan. It might be credit trouble from the borrowers past, excessive debt or the property is not producing a sufficient cash flow to covert the proposed. In these cases the private mortgage lender may be the only available source for funds.
While a traditional lender may look to the property, the borrower and his/her credit, a private money mortgage lender is concerned with the appraised value. As a security, the property is producing or can produce sufficient income to pay the note and the value of the property leaving the issues of the borrower's credit or income as a less important factor in providing the loan.
Privacy is another reason why a farm loan through a private money mortgage is often sought. Many borrowers may not want or be able to provide personal financial information. They may be adverse to the hassles of the application process associated with obtaining a traditional mortgage loan. A divorce or business separation may necessitate keeping financials under wrap. Current, accurate financials may not be up to date. While all these would negate or at least, delay his getting a conventional mortgage, it should have no effect on the borrower's ability to obtain a private money mortgage.
Clients seeking farm loans are able to contact Westrock Capital by calling (877) 995-1829. When you contact Westrock Capital, you can be sure that you’re in touch with the most experienced brokers in the business. Don’t wait another day to find out how Westrock can help you obtain financing for your agricultural venture. Call today.