Savvy real estate investors are always on the lookout for properties that will enhance their overall yield. Private lenders play a huge role in the process as they help finance time-sensitive deals promptly without being tied down by the bureaucratic entanglements prevalent in banks.
Insource Funding is a Florida-based lender making good use of the bureaucratic-light private funding environment. The company offers “no-doc loans” as its primary products, but can they work for your next real estate pursuit?
In this article, we will discuss Insource Funding products and examine the:
- Lending terms
- Application process
- Service quality
Lending Concept and Loan Programs at Insource Funding
Insource Funding is an alternative investment property financier for residential and commercial real estate. The company focuses on providing capital for non-bankable transactions with hard money loans, i.e., loans backed by hard or tangible assets. Like other hard money lenders, Insource Funding mainly sees the value of the real estate while underwriting loans, which reduces the need for time-consuming screening activities like income verifications and credit checks.
Because of the light qualification requirements, you can acquire private real estate loans within two weeks. The delivery speed is a huge improvement from traditional funding timelines, as banks usually take 2–3 months for residential mortgages and 4–6 months for commercial loans.
Insource Funding only offers first-position investment property loans—the general idea is to work with borrowers who have saved up for down payments and are not relying on multiple financiers to acquire a property. The lender’s current loan programs include:
- No-doc long-term property financing (for commercial and residential structures)
- Bridge funding
- Fix-and-flip financing
No-Doc Long-Term Property Financing
The concept behind Insource Funding’s no-doc long-term real estate loans is to eliminate paper-based processing and inconsistent decision-making. The group does not ask for documentation to back up a borrower’s employment status or income stream, which removes the need to submit pay stubs and past W2s. That being said, you do have to arrange other necessary documents, such as:
- ID proof
- Entity documents
- Insurance papers
- Sale or purchase contract
- Past mortgage payment proof (if you’re refinancing)
The lender may request bank statements to verify that you have adequate funds to meet the loan-to-value (LTV) and close the deal. You can get an Insource Funding purchase or refinance loan for:
- Residential rental properties—The group offers 30-year fixed-rate loans for residential rental properties. You cannot request lower tenures. The eligible properties include:
- Single-family residences (SFRs)
- 2–4 unit homes
- Planned development units
- Commercial properties—Insource Funding offers commercial property loans with tenures of 12 months to 30 years. Unlike residential loans, these properties may be owner-occupied as well. Eligible commercial properties include:
- Retail units
- Light industrial structures
- Single-use structures
- Multi-family homes with 5+ units
Source: Barion McQueen
Check out the basic structure of Insource Funding no-loc loans:
|Component||No-Doc Property Loans|
|Loan type||• Purchase|
• Cash-out refinance
|LTV||• Up to 75% (commercial)|
• Up to 80% (residential)
|Repayment||• Amortized (the loan and interest are equated into equated monthly payments)|
• Interest-only (you only pay the interest every month and repay the loan at maturity or upon refinancing)
Insource Funding’s residential loans are only available for 30-year terms, which may be unsuitable for non-rental borrowers. The company offers bridge loans for those who want a short-term solution. These products are quite like long-term loans in terms of loan size and LTV limits, but you get them for tenures ranging from 12 to 24 months. Bridge loans have interest-only monthly payments as they’re held short-term with a foreseeable stream of cash inflow. It’s easy for the borrower to repay the lump sum principal by:
- Selling off the property
- Getting another refinance (can be a hard money or permanent mortgage)
Insource Funding provides bridging solutions for condos, townhomes, single-family homes, and 2–4 unit homes. You can apply for the loan even for rental properties as long as you have a solid repayment strategy to share with the lender.
Typically, the main difference between long-term and short-term loans is the interest component. A 30-year no-doc mortgage would have a slightly higher interest than prime rates—you don’t pay more than 10% in most cases. A short-term hard money loan has interest rates between 8% and 15%, enabling the lender to have a reasonable yield from the investment. Insource Funding does not share info about its interest rates and closing costs online, so contact the lender to make the comparison.
Fix-and-flip financing is another popular hard money program designed for property flippers (also called rehabbers). A fix-and-flip loan is offered for short-term use (12–24 months) so that the borrower can work on enhancing or repairing the property to raise its market value. Like bridge loans, you pay interest-only installments throughout the tenure. When the property is ready, you can secure a refinance or find a buyer to settle the loan.
Insource Funding fix-and-flip loans are available for nearly all types of residential properties, including duplexes, triplexes, and condos. You can request funding from $150,000 to $3,000,000 for 100% rehab financing, although the lender does not mention if the value considers the purchase price and repair budget or the after-repair value (ARV). The funding percentage usually depends on the borrower’s rehab experience and the market viability of the project.
Application Process at Insource Funding
Here are the steps involved in applying for a loan at Insource Funding:
- Verify your email address online to fill out a loan form
- Discuss the available products with a loan consultant who reaches out—no-doc options are usually approved within a day
- Submit the title deeds and other requested documents while the lender appraises your property—once it’s done, Insource Funding underwrites the property based on the:
- Appraisal report
- Title report
- Insurance policy
- Review the lending terms offered by the lender
- Work with the lender and the title company to close the loan
The application process is pretty streamlined for no-doc loans, although bridge and fix-and-flip options may require a different screening approach.
Source: Romain Dancre
Insource Funding—Service Reviews
At the time of writing this article, Insource Funding has a 5-star rating on Google, but it’s based on only three reviews. The Boca Raton-based company is praised for its long-term rental property loans and a healthy commitment to funding deadlines.
If you consider the downsides, the lack of online rate and cost transparency can be seen as an issue as it prevents you from comparing pricing with other lenders. Insource Funding also provides limited financing options, with no products offered for homeowners (self-occupied) and construction-based businesses. Regardless of your borrowing intent, it’s sensible to reach out to a couple of other lenders and see where you stand with each. Your ultimate choice should be the one that is reviewed well and offers you:
- Timely funding
- Convenient processing
- Fair cost structure (you should be able to avoid double fees and unnecessary expenses)
If you want to remove the stress and uncertainty elements from your next real estate endeavor, work with Hard Money Loan Solutions, a lending group from Delray Beach, Florida. The group is rated five stars on Google and has multiple quality reviews from borrowers of different backgrounds and borrowing intents.
Explore Hard Money Loan Solutions—A No-Doc Lender That Always Has Your Back!
If you’re looking for short-term hard money financing, specialists like Hard Money Loan Solutions (HMLS) are the best for the job! HMLS is a financier that serves anyone in need of a real estate loan, and that includes:
- Primary residence owners
- Rental and investment property owners
- Business professionals
- Companies and trusts
- Construction contractors
- Property flippers
- Foreign nationals
HMLS stands out from the competition by providing true-to-purpose, tailor-made loans in the most streamlined and cost-effective fashion. Whatever your situation, the veteran lenders collaborate with you to come up with a solution that works for you. All HMLS loans are:
- No-doc—At HMLS, “no-doc” means you don’t have to prepare anything at all, including your ID documents, bank statements, and tax returns. The group requests paperwork like collateral documents and construction plans that directly impacts the underwriting and legal aspects
- Easy to qualify for—HMLS loans are collateral-based. If the underlying asset is healthy and you can meet the LTV, you’ll likely get the loan. The group requires applicants to have some equity in the property for refinances. HMLS is tolerant of:
- Bad credit
- High debt status
- Past defaults
Apply for an HMLS loan today and talk to experienced professionals about your needs directly—there are no brokers or middlemen involved! The team has a client-first approach and only offers ethical solutions that are in the applicant’s interest.
Loan Terms and Application Process at HMLS—It’s All About Transparency!
HMLS has made its lending structure public to allow borrowers to compare different options and make the best decision for themselves. While every applicant gets a customized package, here are the common terms you can expect:
|Loan Component||Standard HMLS Range|
|Principal||$100,000 to $50,000,000|
|Installment type||Interest only (no amortization)|
|LTV offered||Up to 70%|
|Funding time||3–14 days|
|Origination fee||2 points or 2%|
|Prepayment penalty||No (if repaid after six months)|
|Eligible property||• Residential home (any number of units)|
• Apartment or condo
• Land or under-construction property
• Business-use property (mixed-use also works)
• Any commercial, industrial, or retail structure
• Planned development units
HMLS has programs for various scenarios, including bridge, property flipping, home renovation, new construction, refinance, cash-out-refinance, foreclosure prevention, and business acquisition. Here’s how to apply for a loan with the group:
- Go to the HMLS online loan application page
- Enter basic details about your business, collateral, and the required amount
- Write a customized message (optional)
- Submit the form
An HMLS professional will call you to discuss the financing further—if the logistics are sensible, you’ll be approved within a day. HMLS often delivers funds within ten days if the title work goes smoothly. The group works hard to fund complicated deals with minimum inconvenience as well.
Source: Google Reviews
Borrowing Costs at HMLS
HMLS is the most cost-conscious option in the market right now because the lender forgoes many unnecessary cost elements, such as:
- Underwriting fees
- Processing fees
- Rate-locking fees
- Draw fees (for construction loans)
- Upfront fees
- Digital retention costs
A typical borrower saves about $8,000 by working with HMLS, as their only financial commitment is the interest and pass-through costs (like legal expenses). Reach out to HMLS and get a clear-cut picture of your applicable quotes and deal-specific expenses. The group understands the challenges of the real estate business and is open to supporting clients in difficult times with altered cost structures and repayment plans.
If you’re doing calculations or exploring terms, here are some other lenders you can check out:
You can also tap into your real estate network for more info on suitable lenders, but mind the broker fees or similar expenses if you’re hunting products off the internet.
Featured image source: Tima Miroshnichenko