Category Archives: Hard Money Loans

Common reasons why people go for hard money loan

Hard money loan is a specific type of loan that is provided to the customers who own a home; the loan is based on equity. There are many companies that provide hard money loans. This type of equity based loans has become very popular; people hardly have time in hand these days. Hence, hard money loan is the only solution when you are in dire need of money.

While choosing for the hard money lender, your credit score is not considered. People with low credit score can also qualify for this type of loan. Such loans are secured by property; the quick sale value of the property to be precise. It means, if the borrower defaults and the property is sold to pay off the debt, then the hard money lender will be the first person to receive their share.

Here is a list of reasons why people go for hard money loan:

• The hard money lenders are better aware about the commercial world and various other aspects of personal finance.
• In most cases the lender offer approval within very few days of initial contact and extend the money within few hours after the loan approval
• The complete loan process is simple and hassle free. You are neither required to submit much paper work not to accumulate huge documentation.
• Credit score of the borrower is not a matter of importance. The lender will not check income, savings account statement or any other financial records – no question is a great feature of hard money lending. 

Three easy steps to choose a hard money lender

To select the best hard money lender for your commercial real estate is one of the major steps while going for a hard money loan. But with a bit of research, it becomes easier to reduce the options to a couple of best and selected funding sources. Following are the three steps that could be considered while choosing a hard money

1: Location of the property: Most of these hard money lenders stay in their own home state or few states around where they’ve got better knowledge of the market dynamics and may check out the property with relative ease. However, there are private money investors that offer financing nationwide or even international. It is important to make sure the fund manager has a good knowledge of values in the region in which the property is located. The better the lender knows the marketplace, the more flexibility you have when it comes to appraisals

2: Loan amount: Hard money lenders in LA are often specific about how much they will lend on a transaction. Most have minimum or maximum loan amounts as they have in their own guidelines

3: Loan to Value ratios: Most of the hard-money lenders finance the same ratios. You’ll likely be presented a hard money loan between 50 % to 65 % of property value depending on the type of the property, credit worthiness, income and cash flow of the property and borrower and of course location of the property. For example income producing apartment buildings in major markets are more favorable than a vacant gas station property in a rural area.

There is a hard money lender available for every most property type and just about any required dollar amount. You only need to find the most the suitable one for you.

Fundamentals and basic information about hard money loans

Loan companies are required to be more innovative when the credit is not as good. The companies that provide Private or hard money loans are easily available in comparison to the traditional bank loans. The hard money lending companies are neither inexpensive or no threat as hard cash advance loans perform an essential requirement for loan companies and property shareholders when credit is inflexible to come by. Hard money loans can turn out to be really helpful if tackled properly.