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What are hard money lenders?

Private investors whom lend their money out high rates that local banks won’t do.

Hard money loans are easier to get and funded very fast at lighting speed. It is referred to especially with real estate investors as asset based lending. The collateral on the loan becomes the real estate. They are far from conventional loans, since the underwriting guidelines that private money go by are far different from your local banks.

For those seeking emergency funding sources, or that have situations that are time sensitive and need to close quickly in days not weeks for their money, hard money is a solution period! Credit scores or bad credit is not a factor for most cases, although there are hard money lenders that do look at a borrowers credit history and are credit driven but for the most part they are not credit based lenders.

Based upon their own lending criteria, HMLs lend money on a short-term basis 6 months to 1 year to borrowers who use it for a variety of profitable purposes. These may include the following real estate loan types: bridge, refinance, development, acquisition, rehab, etc. Since Hard Money is more expensive than traditional sources (14%+ interest rate and 2-10 points+ in origination fees), borrowers usually have a financial gain from using hard money, so the high interest or points usually is offset by the financial gain.The loan cost is not an issue when they may make $150k and pay $30,000 to use their money, would you use it if you could make $150k and pay $30k to use it…

What Type Of Terms Can You Get With Hard Money Loans

These types of loans will vary from private lender to lender. Upfront application fee, due diligence fee and commitment fee may be charged and vary from lender to lender again. Generally they will fund a loan for 50% LTV on raw land and up to 50-70% LTV on the finished product, at an interest rate of 14%+ (depending what area of the country you are in at times ) and for a period of six months to three years. They will also charge between 2-10 points as an origination fee, to be paid out of proceeds. Can be interest only or amortized.

Some lenders will fund interest, origination fees, rehab money, etc.; others will not. Ultimately, when selecting a HML, borrowers will need to understand how these options fit best into their plans.

What Makes Private Money A Great Financing Source And Option?

Your local banks, credit unions fill a definite need for low cost money. Borrowers would love to use them for all of their needs and real estate deals. However, there is a market out there that traditional lenders cannot loan money on. That is where private money comes in and why they exist. They fulfill a need that local banks cannot fill due to government regulations, stricter underwriting guidelines, lower risk profiles, longer funding timeline, etc.

Top 10 Reasons To Consider When Deciding About Hard Money Loans

1. SUPER FAST SPEED

Can close in 5 – 14 days after they get all necessary documentation, banks can take up to 45-60 days.

2. DOCUMENTATION REQUIREMENTS ARE EXTREMELY LOW

Require documentation but not nearly as much as traditional lenders, fund based on the value of the property only and not the borrower credit standing.

3. BAD CREDIT NOT AN ISSUE

Bankruptcy, foreclosure and a FICO scores under 490-600 are no problem. Traditional lenders almost always require a great credit history.

4. VERY FLEXIBILE

Flexibility with loan structuring..awesome! Terms, interest reserve, draw schedules, cash out, financing carry, etc

5. GAP/BRIDGE FINANCING

HMLs are usually very experienced real estate lenders who understand that projects do not always follow the given plan. If a gap in funding exists and the loan and supporting documentation make sense, HMLs will typically fund. Whereas, IL’s guidelines are typically not flexible and they turn down gap loan requests if borrowers get off schedule.

6. FOREIGN NATIONALS LOANS NO PROBLEM

Foreign nationals can get a loan with a hard money lender but will be difficult to get a loan with a traditional lender who have problems lending to nonus citizens.

7. WILL LEND ON HIGHER RISKY DEALS

Churches, non-profit are not a problem with hard money lenders, but are with traditional lenders who are concerned if they have to foreclose on a church loan, and the bad publicity they will receive.

8. PERSONAL GUARANTEES NOT REQUIRED

Loans based on the value of the property so personal guarantees are not necessary. Local banks always require personal guarantees.

9. FLEXIBLE LOAN TO VALUES (LTV)

They are more flexible then traditonal lenders being that they will decide what Loan-to-Values (LTVs) they will accept based on their affinity for the project, cross collateralization, possible equity participation, etc. Traditional lenders will turn down loans asap if ltv’s are to high high.

10. SUBORDINATE LIENS

Hard money lenders will lend on a 1st, 2nd, 3rd or lower position, as long as, the value of the property is there. Local banks may do a 2nd, and hardly ever a 3rd. Typically, Traditional lenders always want to be in 1st position.

What Should You Expect With A Hard Money Loan

If you have a fantastic deal with a super LTV and can’t go to a local bank because of bad credit, or need for funding in two weeks or faster. Now that you know and are informed about what is hard money and and value of concept of it you can send the loan to a private lender. You will pay more money for the loan bottom line then your local banker, but will be easier and quicker to close your deal.

Each deal is on case by case basis, unique; terms vary and each structure of a deal can be different. Lender criteria adjust based on the specifics of each deal, so borrowers will need to be flexible.

Here some things to keep in mind when applying for a hard money loan:

* Title insurance is a must
* All delinquent taxes, judgments, etc. and other liens on the property will typically be taken out of the proceeds unless specifically excluded.
* Insurance, typically, will add the lender as co-insured
* Fund control is always set up on construction, development and any loans which have budgets * Borrower will pay all closing costs, fees, etc. out of proceeds
* Many lenders require the property be put into a single asset LLC, which the loan is made to
* Borrower should be prepared to assign rents
* Interest, in most cases, at least partly will be reserved or prepaid
* Some HMLs require an upfront application fee, due diligence fee and commitment fee. Make sure you understand these fees and how they will be used and if they are refundable
* Almost all lenders require borrowers to have money in the deal. Additional collateral may be required by cross collateralize other properties to keep the LTV acceptable.

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Financial Loan Consultant… Hard Money – Hard To Place Loans Specialist

Do hard money commercial and residential loans nationwide, do alternative business financing for any type of business on a national level as well!

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Call now 24hrs voice mail at 718-512-8587

Visit hard money business loans section at Restaurant Funding

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Are you looking for a personal loan, but you know that it will be difficult for you to go the normal way and just use your bank? This is the case for many individuals today because they have less than perfect or even horrible credit. It is almost not even fair, but this is the way the financial world works. This has made many individuals turn to private personal loans to help them when they need the help the most. Here are some options you can use.

There is a wonderful website called Prosper that specializes in the private type of loan. The greatest part is your loan is not funded by a bank, non conventional lender, payday lender, or any other type of lender. It is actually funded by individuals just like you and me that know that things are not always easy. It is a very wonderful systems that allows you to post your loan listing and give details about your situation and how the loan will help you accomplish what you are trying to accomplish.

There are also many individuals out there that act as lenders to those with bad credit. It is just a matter of finding these individuals and using a free classified website like craigslist might be the key. You can post in the wanted section and create a headline that will draw in anybody that would be willing to extend a loan to you. Make sure to tell your story and what you need the loan for so that the individuals can sympathize with you and understand your situation.

Another option is to use a pawn broker. These types of places will offer you loans against anything that holds a value. This is a great way to get some extra cash and to do so rather quickly. These are not as private as all private personal loans, but they are easy to get and you can get this type of loan the same day. That is also the case with a payday loan, but they are not private at all and if you want your loan to be private, then you are probably better off finding an individual to help you.

You can get more information about Private Personal Loans and discover everything you need to know about Online Personal Loans at:

Private Personal Loans

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At first, hard money lenders may seem difficult to locate. However, you just need to know the right places to look. Professionals such as accountants, attorneys, and insurance agents have often have clients who are hard money lenders or more generically, private lenders. Especially, if they think they could profit by your endeavors, these professionals often will be eager to refer a source.

Settlement attorneys are often very knowledgeable of individuals in the field since they write loan documents for hard money lenders. Because of their familiarity with the work, attorneys may be hard money lenders themselves.

Since accountants have clients seeking to invest, they are another great source. Real estate is a very secure investment and lenders are not timid to real estate loans, especially when the long term value is low and the interest rate is high. Usually trust in accountants is very high as people let them do their finances. Therefore, a referral from an accountant should carry a lot of weight for a lender

Another method for uncovering lenders is to research the homes undergoing renovation. The courthouse can provide information regarding the lender involved in the renovation projects and often a private lender is involved. Concentrate on contacting lenders who have homes in the same area where you want to invest as their background and familiarity with the market makes them a more likely source.

Insurance agents will also be knowledgeable of the names of hard money lenders in your region. Any hazard insurance policies issued will have listed a “loss payee” if a lender is involved. An agent can go through their records and find names of private lenders on policies they have written.

Mortgage brokers who regularly work with investors are a good source. There may be a fee associated with the referral, but if it means finding a source, it very well might be worth it. Finding a hard money lender is not difficult if you have connections, know the proper circles to look in, and ask around. Stick to people in your area. It may require persistence, but eventually you will find one. They do exist. It just might take a little ground work to uncover them.

If you are looking for a hard money lender or more information about the industry in general, contact the professionals who take a hard bite out of the hard money business at http://www.pitbullmortgageschool.com today.

Joseph Devine

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When considering a home purchase you will want to excercise many options other than the traditional lending facilities and these have been known for the highest interest rates. If the traditional mortgage lenders are not able to meet your financial needs, you may consider turning to hard money lenders. By going through hard money lenders, you can close a faster loan and get access to your cash sooner. If you are starting a business, buying a business or you want to upgrade your current business, getting a hard money loan might be perfect for your situation.

Many companies offer hard money loans, and if they can’t finance you, you should have no problems finding hard money lenders that will back you and your business. You can finance equipment, commercial real estate, small business loans, construction loans, and more with a hard money loan.

Equity based hard money loans can be funded in as little as two weeks when you apply with hard money lenders. Private lenders can use your commercial property as collateral for these quick and easy loans. Most loans have up to a 75% loan-to-value ratio, and have a super fast turnaround time for funding.

From 1 million to 300 million, you are sure to find the right loan you need. Hard Money Lenders and Mortgages

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Many of us tend to live from paycheck to paycheck and it can be difficult for us to keep up with all of our bills on a regular basis. Unfortunately, things can happen that can take us from having good credit to bad credit in a relatively short period of time. As a matter of fact, just missing a few payments on a regular basis can drive our numbers down considerably. Although having bad credit is not necessarily going to damage you personally, if you are buying a house with bad credit, you might find it difficult to get the lending that you desire.

There are several different things that you can do if you are buying a house with bad credit. First of all, you can go to lending institutions that specialize in dealing with people with less than perfect credit and they may help you with your home loan. Although this is certainly a way for you to get into the home that you desire, you may end up paying more in interest fees which can make it difficult for you to make the payments regularly as well. Always make sure that you are looking at both the interest and any fees that are attached to the loan to see if it is really worth your while.

You may also be able to get some government funding if you are buying a house with bad credit. The government has plenty of programs in place which help first-time homebuyers and those with credit trouble to get into homes. These are certainly worth looking into if you have had a difficult time getting funding through traditional means. They may also be willing to subsidize the loan to a certain extent which can help you to be regular with your payments and to get your credit score back where it needs to be again.

Buying a house with bad credit can be a very difficult thing but it does not necessarily need to stop you from getting your home. Although money is a little bit more difficult to come by than it was a few years ago, there are always options that will help you to get the funding that you seek. Just make sure that you are shopping around at the right places so that your credit is not hit too many times in the process. It typically only takes a few tries and somebody will point you in the right direction in order to get you into the home of your dreams.

Ann Born researched hundreds of credit sites preparing for “Buying a House with Bad Credit” as seen at http://www.officialcreditrepairtips.com This article may not be reproduced in any way without including the Author’s Bio.