Hard Money Lenders Process

March 24th, 2010 1 Comment   Posted in Articles

Hard money lenders are usually individuals who have money to invest and are looking for a healthy return on their investment. These are private hard money lenders who offer different types of loans that are for a short term so credit history is not as important as other considerations. Collateral is more likely their concern or high equity in property. Private hard money lenders are not that hard to find but you will probably need to be ready to agree to points on property, high interest rates and large down payments.

One method to locate money lenders who offer hard money loans is simply to approach these individuals and ask about the possibility of them making you a private money loan. Give them full details about the investment that you want to make and how you will be planning to repay the money that they lend to you. This will in many cases result in an investor making a hard money direct loan to you that they would normally not have considered.

There is a possibility that one of your friends or family members may be in the position to fund your venture. Even though they are not hard money lenders, because of your relationship with them you may want to approach them first. Remember, both you and the lender will make a profit on your venture. Once they understand that you are offering collateral and a generous interest rate they will probably be excited about earning some money on their money.

There are a lot of opportunities to be found online as well. Private money lenders will come up as a match to your search criteria and should have contact information. You can speak with these lenders and share the details of the venture you are considering and the terms of the personal loan that you want. Some sites offer a list of hard money lenders. Another method of finding a lender is to place an ad in your local newspaper explaining that you are in search of a loan and that you will pay it back with generous interest and provide collateral. This is a good way to find investors who are looking to make a quick return on their money. When they hear your terms they may just be willing to offer hard money financing. If you are contacted by a potential lender, give them all the details of your venture and offer collateral plus a high interest rate on their loan to you. This may just end up being exactly the funding you need. Be sure you can easily meet the terms that you discuss and have a professional check your contract before you make a commitment.

Commercial Hard Money Loans, Sign Over Your Real estate

March 21st, 2010 Comments Off on Commercial Hard Money Loans, Sign Over Your Real estate Posted in Articles

When someone experiences financial difficulties and need to borrow money, especially large amounts of money, they can apply for a commercial hard money loan. If they have a poor credit rating already they may find that they have few options when it comes to getting needed funds. Many who are in financial distress seek out a loan that is large enough to pay off many smaller debts. These can be obtained from hard money equity lenders who must determine if the property in question has enough value to be worth the amount requested in a loan. This type of loan enables a borrower to have just one larger payment that most likely will result in paying out less in overall interest in the long run. A commercial hard money loan will give that borrower a chance to catch up on their bills.

Obtaining a loan based on the value of property is called a hard money mortgage and can prove beneficial to people who own property as an asset but do not wish to sell it. Often times a private money loan is merely a private lender who wishes to invest in real estate in exchange for the interest he will gain during the lifetime of the loan. They will be willing to lend based on what the property “loan to value” is at the time. As an example, if the property is valued at one hundred thousand dollars, the largest amount the borrower can expect to receive is about sixty five to seventy percent of that value, or sixty five thousand to seventy thousand dollars.

Finding parties interested in lending commercial hard money or fast hard money for those in need can be considered a last ditch effort when money is needed quickly and the real estates owner does not wish to entirely give up their property. They borrow based on the value of the real estate and risk losing it if they cannot repay the money borrowed in a set period of time.

Owning property can be an asset for some but often they consider themselves to be real estate poor due. When the values on real estate “crash” as they have several time in the past, commercial hard money lending can be a risky business for lenders. In the early nineteen eighties and again in the early nineteen nineties property was devalued considerably but eventually came back up. This made the “loan to value” rates lower overall to protect investors.

Becoming A Hard Money Lender

March 18th, 2010 4 Comments   Posted in Articles

Right at the core of a good real estate investment plan is becoming a hard money lender. There is always danger involved in loaning money but being a hard money lender literally opens up a new way to being a successful real estate investor. Being the one who does the lending puts the control into the investors hands and also provides the opportunity to earn a much higher rate of return on any investment he makes. As you can see there are several ways to make money in real estate investing that involve more than just flipping properties.

To become a hard money investor it is necessary to take a good hard look at the source of the investment opportunity. Your money that you use to invest may come from your IRA or from savings. If your source is hard money brokers or trust deed there is an investment minimum that you need to meet. This minimum can be as high as $100,000 or as low as $5,000. Your choice will be your own comfort level remembering that any loan investment is a risk. It may not be prudent not to put all your eggs into one basket. There will be other deals that will come along.

Becoming a hard money lender means that your cash on hand needs to be more than if you were investing with a trust deed firm. You will of course need to have good legal advisers that can assist you in drawing up your appraisals, underwriting, loan documents, loan servicing, and title services. To find hard money financing firms with investment opportunities, an online search will turn up many local firms.

When you find your company you will need to ask a lot of questions and check into their references. You will want to know the full details of the underwriting process of the trust deed firm that you consider. You need to know their years in business, their default process, the investment minimums, the loan to value guidelines and the regulatory practices that exist in their state of operation. There are public records available that you can check to see if the company has any outstanding complaints. Check their references with their present investors. If all this is not available then move to another firm or if you have decided that you will not use a firm but become a hard money lender on your own then you will need to set a team of professionals to put together any potential deals.

How to Refinance a Hard Money Loan

March 15th, 2010 1 Comment   Posted in Articles

The hard money loan is usually one that is provided by a private lender or individual who has money to loan as an investment. The loan is usually based on the value of the assets. Each loan will vary in its terms depending on the holder of the loan but this type of loan is always very strict in comparison to traditional lenders and the rate of interest on the loans will be much higher than other types. Usually the hard money loan will need a thirty percent down payment.

If you do have a property or a foreclosure that you have purchased using hard money funding it is possible to do a refinance of the loan and turn it into the conventional mortgage. When doing this the borrower needs to be very careful about the terms of both types of financing. Before beginning the process to refinance, the borrower should be very sure they will qualify for the loan. Hardmoney lenders usually don’t require a credit score that is high but conventional loans put great significance on the score.

Other qualifications have to do with seasoning. This is a term used which is about the length of time that the seller has owned the property. Refinancing of a loan can be contingent on the seasoning of the hard money loan. This happens to be a variable with different loan institutions so the borrower or seller needs to know they can meet these requirements before any deal is constructed. A loan that is the primary residence of the borrower will not be from a hard money investor. This is also a consideration for refinancing with any traditional funding.

When the refinance is to take place, the current value of the home will need to be verified and anything that has been repaired or fixed will need to be validated with paperwork and receipts about each update done to the home. The seasoning issues of the home may make it so that the investor will have to wait up to a year before beginning any refinancing.

The terms of the conventional loan, the terms of the original hard money mortgage loan, the credit rating of the applicant, and the seasoning requirements will all dictate whether refinancing of the hard money loan is possible. Hard money foreclosure can be stopped by refinancing but finding the best service on the market today will take some investigation by researching and comparing options. There are reputable stop foreclosure specialists available that help with finding the best service for refinancing.

Fast Hard Money When Its Needed

March 9th, 2010 1 Comment   Posted in Articles

Starting out in the real estate investment profession can be difficult if you don’t have easy access to fast hard money for purchasing property when you are ready to buy. There is good money in buying property, fixing it up to increase the value and reselling it at a substantial profit. To do this you have to have the money on hand when you see the deal or someone will beat you to it. That is where getting your hands on funding quickly is necessary. Did you know that you can get fast hard money through a lender specializing in approving a hard money rehab loan?

Real estate can be a prime investment these days. There are excellent properties in need of a little work that are selling for far less than appraised value. If you have tried getting funding quickly through a bank or other financial institution, you have come to know this can be like pulling teeth. By working with a lender you open the doors to the opportunity of getting approved for a hard money rehab loan using this painless approach.

Fast hard money lenders are looking for quick deals that are profitable. This makes them more receptive to the plans and ideas presented to them. Once you have provided an application and enough detail about the property that can justify that once you rehabilitate it, and showing a favorable ROI, you have done the bulk of the work that it takes to qualify. Another benefit is the lender will examine the property value and not your credit, making their course of action quicker and smoother.

Submitting an application for a hard money rehab loan is a fairly straightforward process and can be done on the internet. The information you will need to have for a advantageous approval is the current market value of the property, the market value in the property’s improved condition, and whether there is outstanding debt owed on the property. Most importantly, you need to be able to articulate well your ability to successfully repay the loan.

The uniqueness of a hard money rehab loan is lenders and investors will allow you to pre-qualify for funding. This not only makes it easier for you to have the fast hard money on hand when you need it, the process is quick and it allows you to start your project without unnecessary delays.

Private Money Loan Primetime

March 6th, 2010 5 Comments   Posted in Articles

With the real estate market in a mess, it is an excellent time for the private money loan aka: the hard money loan. When people speak of a hard money lender, usually, they are referring to a person who has a large sum of money and is willing to lend the money to people as long as the loan is secured by real estate. The lender will not be as concerned with the borrowers ability to pay or his credit report for that matter, he is mostly concerned in lending a set amount of money according to the value of the property. The private money loan is designed to help people who are in a financial crisis of one sort or another.

There is no shortage of people who are in a financial crisis and need to borrow money today. There are thousands of people that are facing losing their homes to a short sale or bank foreclosure, due to the drop in real estate values and the economy, plus a few other factors. This has made an ideal climate for the hard money lender. This can be a good situation for both the lender and the borrower in the right instance.

The hard money loan will be secured by the property. The lender will make sure his money is secure in two ways, short a few creative twists. One way is that the lender will not even entertain lending more than 70% of the present value of the property. This insures that if the borrower defaults, he can sell the property for at least, if not more than the original loan amount. The next way is that he will insist on having a first position lien on the property to make sure he gets paid first on the sale of the property.

There may be a few variations of the first lien to secure the loan. The property may have a loan on it presently and the borrower may only want a small amount of money and not pay of the 1st lien holder. If this is the case the first thing is the loan to value ratio may drop to 60% so the lender gets his money in the case of default. The lender may opt to put a first position lien on a different property to secure the loan if the borrower has more property. Either way, the lender will make sure that in any case, he will get his money back on the private money loan.

Private Hard Money Lender Means Quick Loan Approval

March 3rd, 2010 Comments Off on Private Hard Money Lender Means Quick Loan Approval Posted in Articles

A private hard money lender can be the solution you seek if you are facing difficulty getting money needed for an investment, a commercial venture, or a major acquisition. There have been many recipients of hard money funding. If your loan application has been denied, this avenue is worth pursuing. There is absolutely nothing to lose. A private hard money lender could help you satisfy your financial needs.

Hard money funding is an easier way to get a loan application approved. The process of seeking financial backing is not as stringent as most banks and lending institutions. A lender will look at your individual situation. A credit score or credit history is not a major factor in the decision making process.

Lenders will approve an application based on your situation as it is today and how you will grow in the future making it possible for you to easily repay your debt. Once the possibility of your flourishing future is comprehended, the lender will be more apt to being flexible.

Most hard money funding transactions work similarly, however, when you deal with a private hard money lender you are at a better advantage in getting greater flexibility in the terms of the loan. The reason being is you are dealing with the key decision makers who are at liberty to agree to the terms without obtaining authorization from other parties. There typically aren’t many set in stone requirements and guidelines

There are a variety of reasons people request hard money loans. In some cases businesses need working capital quickly. These loans can be used to pay out an existing loan to enhance the cash out amount which can be used at your discretion. Oftentimes, a hard money loan is used for real estate or acquisitions.

The application process is quite simple. You will need to be able to prove your net worth and any other substantiating financial data that will paint a clear picture of your future financial growth. This will be the prescription for a successful approval for hard money funding. Applications can be completed on line by providing details regarding the loan you are seeking.

The information you will be requested to enter on your application is collateral property that you own and a detailed description. An appraisal will be needed. An explanation of how the funds will be used will be included along with details on how soon you would like to close on your loan. When seeking a private hard money lender, you will find a host of private firms promoting their services on the internet who are ready to assist you.

Hard Money Mortgages – The New Saving Grace

February 28th, 2010 Comments Off on Hard Money Mortgages – The New Saving Grace Posted in Articles

Hard money mortgages are in huge demand today. With all of the foreclosures and loan woes today, in spite of Obama’s mortgage restructure plan, the demand still exists. Even though there is this big push on the mortgage companies to restructure loans and stop the foreclosures, this does not seem to be happening. The banks and lending institutions are following such strict guidelines that a very small percentage of those who are in mortgage default are actually getting any help. Enter the hard money lenders who are helping people to save their homes with hard money mortgages.

The basis of a hard money loan is not in the person’s current credit rating or even so much the borrower’s ability to pay back the mortgage. A hard money loan usually is funded by a private investor who has a large amount of money and is looking to get a better return than some stale CD plan at a bank. As a matter of fact, the hard money lender is putting his money in a safer place than the stock market in this day and age. Investing is real estate can, if done properly, be quite safe and profitable. Both the lender and the borrower can benefit from a hard money loan.

The investor will help a borrower get caught up on his house payments so the borrower will not lose his home and equity to the bank in a foreclosure or short sale. The lender will make a decent return on his investment. This can be a win-win situation. However, in some instances, the borrower is taking a larger risk than the lender.

The borrower is already in a financial crisis, if, after the loan is funded on the home, the borrower has another crisis, it can mean he will lose his home for sure. The reason for this is that the lender will guarantee his loan by lending only up to a maximum of 70% of the value of the home and ask for a first position lien on the property. This means one of two things, either the hard money lender pays off the bank and the entire loan on the property is hard money or the hard money lender will ask for another piece of property for collateral.

The important thing to remember is that the hard money lender will foreclose to get the investment back if the borrower defaults. The homeowner should be sure he can pay the loan back as agreed. As long as the loan can be paid back, the home owner can save his house by getting his money from hard money mortgages.

Hard Money Mortgage Loans – Check Them Out

February 25th, 2010 Comments Off on Hard Money Mortgage Loans – Check Them Out Posted in Articles

In the past, there has not been quite the demand for hard money mortgage loans there are today. The hard money lenders have always been, by tradition, private individuals that look to invest their money in real estate at a healthy interest rate. These loans are made by individuals because the traditional banks and financial institutions do not make loans to someone who is going into or is in foreclosure. You will be able to find someone who is wiling to make hard money mortgage loans on the internet with a few key strokes and a click or two of your mouse.

The hard money loan terms are usually quite aggressive in nature. The points or fees that you will pay to get the loan will be about double what the other types of mortgage loans would be for the same amount of loan. This is because if you are looking into hard money mortgage loans, you have probably exhausted all your other options and this is a last resort. The reason for this is that you are definitely a credit risk to say the least and the investor will want to be compensated for that risk. So the only way that this lender is going to make this loan to you is if it is very profitable for him.

The lender will also want to hedge his risk by lending on only a percentage of your home’s value. The highest amount usually lent to a borrower in this type of financial situation is 70% of the value of the home. This will insure that the lender can recoup his money if you do not perform on the loan. Sometimes this can be very tricky because some hard money lenders will want to have a first lien position on the property. If they take a second position the total loans against the house will usually never be more than 60 or 65% of the value. Again, this is to insure that the lender will get his money one way or the other if you default.

You should also be prepared to pay a higher interest rate than you are accustomed to on a mortgage. These rates are typically from 11% to 19%, all depending on the risk in this particular situation. It is worth looking into a hard money mortgage loans if you face losing your home to a short sale or foreclosure. No matter what the interest rate, if you can get a payment that you can afford and save your credit and home it will be worth it.

Hard Money Mortgage Lender

February 22nd, 2010 Comments Off on Hard Money Mortgage Lender Posted in Articles

A hard money mortgage lender can be key in today’s economy. Now more than ever the real estate investor needs to have funding available that is not necessarily dependent on perfect credit. The financing will be only for a short term investment of real estate property. For the real estate investor, a hard money mortgage lender is usually their best option. Hard money loans are normally very short term loans that are made against real estate. These are loans that originate outside of the regular channels of conventional financing like banks. A hard money mortgage lender is usually a private individual or a small group of capital lenders. The hard money lender is often an individual that has done a lot of real estate investing and now wants to make his capital earn more money by investing in the projects of other real estate investors. Some of these lenders will use capital from their pension funds or IRA’s.

The term ‘hard money’ is usually considered another term for a ‘short term’ loan. These loans are often for less than a year and can even be for just a day or two depending on the investment property. Along with a hard money mortgage loan, there will be points and high interest rate charges. A point is usually one percent of the loan amount and is considered an additional fee or up-front charge with the interest rate falling between 12 percent and 18 percent annually. These are all variables that depend on the lender and the property. The points will also vary depending on the deal and will range between five and ten.

When a real estate investment will not qualify for traditional financing and the funding will be needed quickly, a hard money loan is the best and sometimes only option as long as there is good equity in the property. Usually the property is a really good deal for the borrower but they do not have quite enough cash or good enough credit to take advantage of the opportunity by using conventional funding. Sometimes even the primary residence homeowner will want to use hard money financing as a bridge so they can secure their property and will pay off the hard money loan in a few days when their traditional permanent financing comes through.

If you are looking for a hard money mortgage lender one good place to find them is through clubs for real estate investors. Investment groups can be found in most areas, even in the most remote places and these groups meet either weekly or once a month in order to do networking. The hard money lender usually can be found at these meetings or at least you will find investors who have connections with these types of lenders.

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