Interest Rates

[john]

I live in Calif. and need to find out what the laws are regarding what the maximum interest rate is that can be charged on homes that are pre 1976 and are on leasehold land. Are these loans protected under either Usuary Laws or Predatory Lending Laws? Does it make any differance if the home is post 1976 and either personnel or Real Property. If you can refer me to an attorney or website that can answer these questions it would be greatly apprecitated.
Thanks,
John

[Allan Brown]

Dear John, Higher risk for the lender may involve higher interest rates. I have seen those older homes command 14-18% rates. They are personal property loans and if the lender wants to make such a loan (Usually short term 10-12 Years), the lender may try to balance the risk by increasing the profit. Usuary laws in California are best used by the banks against private individuals and I believe the limit is 10% for someone carring a 2nd trust deed. Check with an attorney. If you agreed to a high rate in order to obtain any loan, you may be stuck with it. I have been in this business for 29 Years and I have seen interest rates from our current low (5.675) all the way up to 21% in the 1980's. Find a newer home or E-mail me at [email protected] and I will suggest some other alternatives. Allan Brown

[john]

Allan,
Thanks for taking the time to respond. I will be the one originating and funding these types of loans on behalf of the buyers and need to find out what the State laws are regarding interest rates on these type of loans. If you know of an attorney around Orange County. CA or a webpage that might address this I'd greatly appreciate it.
Thanks again,
John