Hard Money Lenders Online

Need A Hard Money Home Loan? Expect To Pay More In Interest

Those with credit problems such as a poor credit rating, a previous bankruptcy, or perhaps have even had to face a home foreclosure in their recent past will need to find a hard money mortgage lender in order to obtain a hard money home loan. Many times people have so much money tied up in their home and real estate that they find it necessary to borrow on their equity if quick cash needs arises. Replacing a worn out automobile or broken heating or air conditioning for the home are costly and require a quick fix. This is where obtaining a hard money home loan can prove beneficial to the borrower.

Hard money home loans are very similar to private mortgages, but they are made through hard money lendors who are willing to take a gamble in exchange for interest earned on the loan. The rate of interest on the typical home loan is based on whatever the going rate is when a loan closes. In the case of the hard money home loan, the rate of interest will be higher and typically based on what is know as loan to value guidelines. This generally means the property or real estate in question can be borrowed on based on an average of sixty to sixty five percent of the properties value. If the home is worth two hundred thousand dollars, then a hard money loan may be up to one hundred thirty thousand dollars. This amount will vary depending on how much equity the home’s owner has in the home.

Typically, a hard money investor will demand to see a current credit report done on the borrower. And they will need to communicate with any current mortgage holders to determine how much remains on any mortgages. They will also require an appraisal be done to find the true value of the home or real estate at the present time. Hard money residential lenders are allowed to charge higher than the average rate of interest because they enter into the agreement with high risk borrowers. These risky borrowers have already been to a Freddie Mac or Fannie Mae bank or government backed institution and have been turned down due to their poor credit history.

Hard money lenders will want to be the “first lien” holder and expect the borrower to pay off any existing mortgages or loans on the property with the hard money borrowed. This way they are assured of getting their money back if the borrower defaults. Obtaining a hard money home loan is always up to the discretion of the hard money lender.