Hard Money Lenders – All you need to know about them
Category : Hard Money Loans
First time investors are always curious about hard money lenders. Let us discuss few basic principals about hard money lenders. what the term “hard money” means. Money while being discussed between the investors, it is either considered to be “soft” or “hard”. Hard money, as the name shows is not so difficult to obtain, but the terms and conditions are very specific and a bit more strict. They have to be, because most hard money comes from private individuals with a great deal of money on hand. This is why hard money is also known as “private money”. The money used for investment purposes comes from people, just like you, and not from a typical lending institution. So they give first priority to protect their investment capital. This is why the terms have to be strict.
It is always better to know what the terms are when dealing with a hard money lender so you can find the one that completely suits your requirements. Typically they will only loan you up to 70% ARV (after repaired value). This means that a hard money lender can loan you up to 70% of what the home is worth in repaired condition.
Other terms that can be expected from hard money lenders are high interest rates. Interest rates vary from 12% – 20% annually and terms can last for 6 months to a few years. These rates may vary depending on your credit score and experience. In most cases, there will be closing costs or fees to use hard money.