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Announcement: Benefits Of A Hard Money Loan

March 3rd, 2010 Comments Off on Announcement: Benefits Of A Hard Money Loan Posted in General

This post looks at the benefits of a hard money loan, which is a non-standard type of loan that is provided by private companies or individuals and not by banks and other sources of conventional loans. The hard money lender is willing to take bigger risks that the banks do not want to cover because the loan is not based on the credit rating or score of the borrower but on the value of the collateral, which is usually a real estate property. To compensate for the higher risks undertaken by the lender, higher interest rates and certain fees are charged. Basically, borrowers are interested in a hard money loan either because they are in a hurry to obtain the money or they are incapable of getting a loan from the usual sources.

One of the primary hard money loan benefits for real estate investors or buyers is that it can be obtained during those times when there is not enough time to get a loan from a bank or when it is not yet possible for a bank to provide a loan. In these cases, a hard money bridge loan is often needed. For example, if a homeowner is in the process of buying a new home while selling the old home, he or she may need the loan to pay the down payment for a particular property while the proceeds from the sale of the old home are not yet available.

The benefits of a hard money loan also become obvious when the borrowers are trying to buy time to save their properties from foreclosure. In this case, the hard money loan is used to pay for the outstanding loan to remove the home or property from foreclosure status. What this means is that the borrowers are quite sure that their financial situations will soon improve and that they would be able to repay the loan when the time comes.

A real estate developer may also take advantage of a hard money loan during those times when a bank loan is not yet possible. For example, a conventional loan is not yet permissible when the permits for the project have not yet been approved because the bank could not be sure that the project would push through. The developer gets the non-standard loan to finance the project and after the permits have been approved, he or she gets a conventional loan and repays the former loan.

Announcement: How To Get A Hard Money Loan

February 12th, 2010 10 Comments   Posted in General

This post will provide some guidelines on how to get a hard money loan, which is utilized by architects, land developers and small businesses to buy machinery or real estate property to avoid the need to sell any assets. However, before people should push through with their applications for hard money funding, they should familiarize themselves first with regards to the risks and benefits of a hard money loan. The disadvantage of this type of loan is primarily the high interest rates and other fees that are charged by the private lender and that you might sign up for a rate that would be bigger than you can handle. The advantages of a hard money loan are mostly the speed with which they are provided compared to conventional loans and the fact that they would not depend on the credit score of the borrower.

The first step in looking for this kind of loan is to search for lenders who have already experienced providing them. Banks and other traditional sources of funding do not provide it because of the high risks that are involved. And after you have located the hard money lender who has successfully provided this type of loan, it would be advisable to determine the prevailing money rates. However, the interest rates are not based on the federal rates but on the various loan quotes that have been made.

The next step is to have an expert determine the value of your property because this private money loan would be based on a certain percentage of this value. Make sure that you get the proper documentation that would get the appropriate loan amount. After this, do not forget to ask for the advice of a real estate lawyer and determine the usual prepayment penalties and what would happen in case of default.

Remember to apply and use only one hard money loan at a single time to avoid getting into a situation where your property may be foreclosed. Make sure that the projected cash flows of your real estate project would be capable of paying for the loan. In fact, a certain safety factor should be incorporated in the event that the expected amount of cash flow does not materialize. The final step is to work on the construction contracts, building permits and other documents that would be needed for conventional loans so that you can avoid the high interest rates in the future.

Announcement: What is a Hard Money Loan

January 24th, 2010 1 Comment   Posted in General

What is a hard money loan? A hard money loan is provided by a private investor where the collateral used is the borrower’s real property. This is also known as a private money loan because lenders are mostly private individuals who have accumulated a substantial amount of cash and they are willing to take advantage of the opportunity presented by people who require a loan but are unable to get it through the conventional channels, such as banks and finance companies. Borrowers who own real estate usually go for a hard money loan because the lender would not check on their credit rating because the basis for the loan is the market value of the property that is being offered as collateral.

The primary disadvantage of the hard money loan are the very high interest rates and fees that are charged when compared to bank loans. However, borrowers often look for a hard money lender during those times when the money supply from banks and other conventional lenders is tight. The processing time for the loan is also much faster and there are fewer documents to submit. Thus, it can be depended on by real estate investors who are running against time to purchase a particular property before others like them could.

A hard money bridge loan is one type of this loan where the borrower can use it to bridge the gap when a conventional loan is not possible because of time constraints. One example of a time-constrained situation is when the closing date for a mortgage is fast approaching but the bank that is handling the commercial mortgage is still conducting its due diligence. The borrower usually gets the bridge loan rather than lose the deposit that he or she has made.

Another possible situation when a hard money loan could be used by a real estate investor is when he or she wants to convert a particular property to another use. A bank normally would not want to provide the loan until the conversion has been finished and the property is already producing cash flow. Despite the higher interests and fees charged by the lender, the real estate investor would rather use that money than find equity partners. It should be noted, however, that this kind of loan often depends on existing relationships between the borrower and the lender. This is vital for the borrower to ensure that he or she will be getting the best possible terms from the private lender. e lender.

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.

What Can a Hard Money Lender Do For You in Today’s Market?

December 15th, 2009 Comments Off on What Can a Hard Money Lender Do For You in Today’s Market? Posted in General

Small and established ventures can utilize a commercial hard money lender when others have turned them down. This is a method of financing which is useful when your business is in need of capital for an upgrade or starting off their venture. Small ventures and great commercial ideas need some financial backing or they may come crashing down after a short period of time. This is why we have the need for commercial hard money lender.
Commercial Hard Money Lenders are ready to invest in small ventures to cover their immediate needs. The hard money lender can vest their interest in the company they lend. Every lender has their own policies and not every lender gives benefits to all the ventures alike. A little bit of guidance is required to choose the best bank which can benefit your business in every way.

Commercial Hard Money Lenders offer various benefits for ventures and some of them are:

• Business financing

• Industry mortgage for real estate

• Commercial credit

• International Trade Finance

• Supplies Financing

• Purchase Finance

• Loan Syndicating

• Energy Lending

Every one is accessible over the web nowadays. It is essential to find a lender which can offer you online facilities which can make your work much easier. This way, you can make your payments easy and you can take control over the transactions of your company.

Mortgages can be applied online 24×7 at your leisure. But, you need to have some kind of identification before applying for such mortgages. Papers about your business are also required on hand for applying.

Commercial hard money lenders can help take your business to the next level provided they take care of your financial requirements. A hard money lender is only a short term solution and they can guide you to where you need to be. Many people opt for small scale money lenders for this particular reason.

The most important thing while going for a mortgage is to read the conditions well and ensure that you are fully aware of each and every condition as there may be some clauses which require you to stay committed to the mortgagor even after the expiry of the deal such as asking you for reports of your company status. It is therefore essential to seek legal advice before signing the agreement.

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