The thought of losing a home or property can be scary and unsettling for anyone who hasn’t sought out hard money foreclosure assistance. There is no reason to face this troubled time of your life alone. Taking advantage of a hard money home loan can help resolve your situation fast. Seeking the services of a hard money foreclosure specialist could be the solution to help you keep the home that you’ve worked so hard to uphold.
Even if you have fallen way behind on your mortgage, there is still time to get a hard money home loan. If you have received a foreclosure notice, hard money foreclosure companies offer some of the best solutions for bringing threats to sell the property and public auctions to a halt. Don’t struggle alone. Leave it up to these experts who specialize in providing effective programs.
When conducting business with lenders who can approve a hard money home loan you get fast service. Many lenders are made up of groups of private investors who can make immediate decisions on loan approval. These loans are designed to help get you above water until you steer yourself clear of hardship. The terms of the agreement are anywhere from twelve to twenty-four months.
The luxury of the application process is your credit history or your credit score is not the basis for a loan like other financial institutions require. The criteria will be based on the property and the property value. In most cases the loan will be based on a percentage of fair market value. The home or property would be used as collateral in some form or fashion.
Most hard money home loan investors look at the equity of the home and will lend approximately 80% of the value. The equity in most instances is the determining factor on the amount of financing you will be approved for. The loan amounts vary anywhere between $100,000 up to millions. On many loans lenders won’t institute a prepayment penalty.
There is a great deal of understanding and support when working with these lenders. It is not uncommon to see investors offering pre-qualification applications. This option is useful for proactive individuals who want to get prepared at the first stage of trouble. The earlier you take steps to contact a hard money foreclosure specialist, the better position you put yourself in to receive a hard money home loan before time runs out.
Hard money lending is done by rather wealthy individuals who are looking to make some profit on their money by lending it to those who they consider good borrowers. They especially look for real estate investors and will loan their money to investors who have found a promising property. Hard money lending is a win/win for both the lender and the borrower. The borrower will make a quick profit on their investment in the property they choose and the lender will make a profit on the money that they lend. These are mostly short term loans and the real estate investor uses the hard money funding to buy and then rehab choice properties.
The term hard money lending is a familiar term in the world of finances. Loans that have flexible payment schedules and easy terms are known as soft money loans. The hard money loan has very strict terms and rigid payment schedules that are totally up to the lender. When the hard money financing is from a private source the terms become even more severe.
The lenders of hard money mortgage loans will all have their own particular criteria for loan approval. The experience of the real estate investor will also be a consideration for the approval of the loan. Real estate investors for this reason will profit from building a strong relationship with lenders of the hard money home loan. There are common guidelines that are used for every loan which is anywhere from one half to three quarters of the home value and the post repairs. The length of the loan will be anywhere between six months to five years. The points will be somewhere between two and ten points on top of the loan.
The advantages of hard money lending are that the money is available much quicker than with conventional loans. As soon as the loan is approved the money is there to invest. This is great especially for the real estate investor. Even closing cost money can become part of the loan which is a big advantage to the investor. Because private hard money lenders are individuals, it is then possible to build strong business relationships with the lender. The lenders may not always be easy to find but there are a lot of them who are looking for new opportunities for offering loans. They will all have hard terms and qualifications for their funding. For the investor, once they have found the right lender for their needs they will always know they have the money they need for the investment opportunities they find. This is a big advantage for the real estate investor
Those who find they are “real estate poor” can find themselves needing cash even though they may own several pieces of property, so they look into hard money equity loans for a quick fix of their financial problems. Those who have most of their cash tied up in real estate often require a quick loan but don’t wish to sell off their property just to get that fast hard money. The hard money industry has long been unregulated formally, either by state or federal laws. However some restrictions do apply (usury laws) when it comes to interest rates allowed on hard money equity loans.
Hard money mortgage lenders are often labeled as “creative real estate investors” due to the non traditional method by which they lend money or obtain real estate. They lend to what the industry considers less than ideal borrowers who have credit problems and may have had a bankruptcy or mortgage foreclosure in their past. Many of these borrowers have real estate in which their money is invested yet they do not wish to sell. If there is substantial equity in the property, a hard money lender may be interested in making a loan to that home owner. Interest rates are typically higher than the conventional rate and they are allowed to do this in most states and this is where usury laws come into effect. The term means interest charged that is above that allowed by law. This is where “creative investing or lending comes into play, and it is quite legal on hard money equity loans.
When a borrower wishes to take out a mortgage on their property the conventional way, they must have a good credit rating, substantial equity in their home, and agree to pay the loan off in a set period of time (usually fifteen to thirty years). In the case of hard money equity lenders, they can stipulate that the money loaned be paid back in a substantially shorter period of time, thus making payment much higher for the borrower. Add on higher rate of interest to that loan and the payments may be even higher.
But if the borrower can handle the steep payments, they can pay it back that much quicker and be done with the obligation. These short term loans can be called bridge financing. The typical hard money equity lenders make a profit on these transactions, but run the risk of losing their investment when borrowers default or they must be foreclosed on.
There are thousands of people today that face losing their homes to foreclosure and the only answer may lie in the hands of hard money mortgage lenders. Yes, there is mortgage restructuring available but the guidelines are too stringent for many people and their particular situation. If you are one of these people, don’t give up hope just yet, there still may be an answer. You may want to find hard money mortgage lenders in your area and discuss your situation with them.
There are a few things that you may want to know about hard money loans before you sign up and take on yet another payment to save your home. Don’t get me wrong here; this can be a much better deal than losing your home to foreclosure or a short sale, as well as salvaging your fading credit score. The hard money mortgage lender will not look at your credit record and will base the loan more on the value of your property than on your ability to pay, although the ability to pay will be looked at closely also.
When you begin to hash out the details of your hard money financing, the first thing that the lender will look at is if he can get a first lien position on your home. Chances are, if you are borrowing the money to save your home from foreclosure, this may not be possible. You will have two chances to rectify this situation. One, if you own other property, the hard money lender may use the other property as collateral for the loan to save your home. Two, if the amount you owe on your home can be entirely paid off and still have the total loan amount at less than 70% of the value of your home.
Depending on the lender, if the first loan amount is low enough, he may not make you pay it off as his second position lien will still give him plenty of room to insure his investment. This is something that will definitely be taken on a case by case basis depending on all factors that the lender is looking at.
Working with hard money mortgage lenders may be your only chance to save your home at this point and is definitely worth a shot. Rather than just give your home back to the bank, or let them sell it for less than you owe, go online and locate a private lender now to find out what your options are.
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.
Private hard money lenders and their financial backing is becoming a win, win solution for lenders and for the individuals that can’t get a loan approved at traditional financial institutions. People that have not had success securing loans using traditional methods are now qualifying for fast hard money loans using private hard money lenders who are willing to fund if the deal is right.
This channel for getting fast hard money is growing in popularity. Hundreds of business minded people have had good intentions and ideas, but perhaps a bit of bad luck due to the lack of funds needed to launch. This doesn’t have to be the case. These lenders can provide viable options for you.
Private hard money lenders are always on the lookout for a good opportunity worthy of a fast hard money loan. This is where your proposal, if it is a good one, will catch their eye. When dealing with lenders to get a fast hard money loan, the key is selling yourself and your idea. If it makes good business sense and shows it will generate a nice profit, in many cases the loan will be approved if your paperwork in order to substantiate the claim of growth and success. This, coupled with the proven ability to meet your monthly loan payments is a sure fit for getting an agreement.
These individuals are predominantly accredited investors. This means they have met the qualifications established by securities laws. A benefit to working with this category of lenders is they are the key decision makers. This eliminates any red tape, consulting, and approvals from higher ups or chairman’s of the board. With that being said, the loan approval process is a little more relaxed and in some cases the deals close quicker.
The industry you are in or the purpose you need the loan for will not matter to some lenders. There are many private sources willing to invest. Some lenders look for specific categories like start-up companies, small internet businesses, and new software initiatives. Others could have interest in real estate, building projects, business expansion, and other areas.
The loan application along with a business plan that outlines your plan for growth is essential. Being able to illustrate compelling justification for yearly revenue growth, strategies for capturing a large market share, and anticipating any barriers and show you will overcome them will weigh in a private hard money lenders and the decision to approve your loan.
When looking for a hard money loan you will find there is little difference between the hard money commercial lenders and the private hard money lenders. In fact the biggest difference may be in the rate of interest charged on your loan. In other words, your transaction will cost you more. Additionally, these commercial lenders do not necessarily follow the guidelines that a Fannie Mae or a Freddie Mac lender residential lender will. Usually the average hard money commercial lenders are is considered to be in a strong financial position and be an institution that has vast deposit reserves.
The large financial reserves they have allow them to take the risk that is often involved when making hard money commercial loans with those who need to borrow that way. The typical borrower who needs to go the way of a hard money loan is a poor credit risk due to past history which may include bankruptcy or foreclosure on previously owned properties. If the property is not in good condition for various reasons, the lender may require the property to be free and clear of any other loans or mortgages before taking on the risk, even when high interest rates will apply to the situation. The “loan to value” ratio may require adjustment from the normal rate of sixty to sixty five percent when hard money brokers or lenders become involved.
Hard money commercial lenders and bridge lenders work with similar programs and have short term loans designed to bridge a gap which the borrower needs to fill. Lending money to fill that gap, at higher than normal rates of interest, and basing it on a lower property value along with the “loan to value” ratio allows the hard money financing to be successful for both parties involved.
Traditionally these commercial hard money loans are considered to be very high risk along with a somewhat high default rate. If these property owners do default on their loan, the will run the risk of losing their property in foreclosure. Additionally, if they have had a previous bankruptcy declared they cannot even use that as a backup, and may lose their real estate completely. If the property owner can manage to sell however, and satisfy the hard money commercial lenders, this will enable them to keep their property and whatever remaining equity they have on their property. Hard money lenders are not in the business of lending just to do those seeking funds a favor; they expect to make a profit.
Hard money equity lenders are avidly sought by real estate investors because the loans they offer do provide an opportunity for the investor to not only purchase their property but also have the funds to refurbish their investment so that they can make a significant profit. Hard money equity lenders are usually private lenders. A hard money home loan is a short term loan that is actually pretty expensive and usually not advisable. The loans are high in fees, rates and loan to value.
Hard money lenders require a huge amount of money in equity to cover the possible eventuality that the borrower cannot repay. With the high equity the lender can resell the property below the market value and turn it around quickly if necessary. This is in theory though because in today’s economy there are a number of properties available that are in foreclosure, short sales and REO’s making a below market value property just ordinary and not the exceptional deal it once was. This means that the investor who offers hard money funding has become very selective about the property and the borrower that they choose. The last thing that a lender wants is a loan investment that turns into a hard money foreclosure.
The interest rates that are part of the loans that the hard money equity lenders offer are very high. They end up being much higher than any of the traditional loans for either residential lending or the conventional commercial loans. The risks involved in the loans are much higher than the conventional long term loan so therefore the rates are much higher. Because this is typically a short term loan of from three months to two years the interest rate is not a major concern. The borrower usually plans on paying the loan off quickly so that the interest rate does not have the impact it would if the loan were for the conventional long term payoff.
Because of the nature of the loans that hard money equity lenders offer, the borrower will usually end up paying anywhere between five and ten points plus the usual closing costs. These fees are high and really only make any sense to the real estate investor who stands to make a lot more money on the property by using this short term loan than he will lose in high fees and high interest rates. The sole purpose of the real estate investor to take on this type of loan is to make money.
Not to stereotype or anything like that but when I think of hard money personal loans, I think of the old fashioned loan shark that we all got to know in those movies made in the 50’s. As far as these types of loans go, in their true sense, they are very hard to come by. There are not any financial institutions or banks that will make a personal loan to anyone with bad credit or is in a financial crisis. That is going on my definition of a personal loan, which would be a loan on your signature and promise to pay only. These signature and promise to pay loans are available on a business level, and they are called bridge loans, mostly to fund a project and the lender is betting that the project pays off. For a hard money personal loan, be prepared to put up some type of collateral.
The hard money lenders are usually private parties and they want as much assurance that the loan will be paid as they can get. It is very common to fund a hard money loan with real estate for the collateral. Although, there are certain instances when you could put anything you own that is of value up for collateral on hard money loan. This will all be up to the lender and just how creative he feels like being on this particular situation.
When you are looking for hard money personal loans, you should be aware that whatever you’re collateral is, you will only be able to borrow about 50% to 60% of its current value. This is because the lender wants to be sure if you default on the loan, he will be able to get his money back out of his investment. The tougher your situation is, the less the loan to value ratio is likely to be.
Just as your particular situation will play a large part in what your loan to value ratio is, the interest rate will also reflect the amount of risk that the lender feels he is taking on with your loan. The interest rates will usually fall in the higher than normal range. This will be somewhere from 11% to 18% depending on the risk and other factors of your loan. There is a place for hard money personal loans and at times they can be of great help.
Great business minded individuals that have a wealth of ideas along with the inability to get private money loans to get started is a waste of talent and it can be disheartening. If you have a weak financial background or very little assets a hard money investor may be looking for your perfect opportunity. Taking immediate steps to motivate them to extend private money loans to help launch your plan is an unquestionable option.
One of the worst things someone with a worthy and profitable business idea can do when the going gets tough is to give up. Fortunately, many people have discovered how much easier it is to get the attention of investors who can help them get their feet on the ground. A hard money investor who is more than able to provide the financial backing that you need is always awaiting just the right deal offering potential. Profitable businesses that are worthy of assistance from these lenders cover a variety of industries. Many entertain all ideas that come their way. They are willing to evaluate proposals and business plans to see if it is a worthwhile venture.
Private money loans can be funded by an independent hard money investor or a group of investors. These lenders in some cases have the funds readily available. In other cases the money is solicited from others and pooled together to get ideas into a productive and profitable stage.
Many lenders are extremely flexible in how they do business. They are open- minded when it comes to the idea being presented if it makes good business sense. Loans are approved for launching internet businesses, new software products, new services in the wireless industries, a variety of POS services, and the up and coming social network avenues. What comes into play when your loan application and business plan is reviewed is the picture you paint representing a record of triumph and growth.
Including an in-depth strategy for marketing and capturing the consumer market, and getting an edge on competitors will make a big statement and be a major factor in getting your loan approved. Having the confidence, portraying the right image, and articulating all ideas well will help get the lenders undivided attention.
If there is opportunity to secure customer loyalty and recurring revenues this would be a huge plus in securing private money loans and easily convincing a hard money investor that you are worthy.