Total Visits: 21

Hard Money Lending Guide

A hard money lender is typically a private lender or financing that is provided by non-institutional lenders. Fortunately, there are many hard money lenders but still, scammers will never lack and for this reason, you might want to consider reading some hard money lending guide to ensure you are well informed before making a choice. People prefer the hard money lenders as they offer a great advantage in your quest to fund your business or real estate projects.

-How to qualify for a Hard money loan

Basically, the hard money loans are not usually based on credit worthiness or credit history of you as a borrower. There are more reliant on security that you can offer to the lender hence your credit score is hardly considered. If you have collateral that they deem as worthy of the loan that you apply for, then you easily qualify for the loan. Many a times, a loan to value ratio is calculated for the laon which is usually a percentage of the property’s value. However, if the collateral you provide is not enough to secure a loan, you might have to offer your private assets to help you secure the loan.

-Loan to Value Ratio

This ratio is calculated as appraised value of the property and the higher the ratio, the harder it is for you to get a loan. Typically, the hard money lenders loan only about 70% of the property value and it is usually a risk for the lenders.

-Interest rates and other related terms on hard money loans

Generally, the interest rates are usually higher on hard money than they are on the traditional business loans as these loans are riskier than the traditional loans. Interest rates may vary from 12% to 29% depending on terms and the small businesses also have to pay 4% to 8% in points. Also, a balloon payment may be required at some point along the way. 70% loan to value is the maximum loan to value ratio that the hard money lenders can accept.

-Hard money lenders

These are individuals or private companies that have funds ready to lend for investment. For you to be a hard money lender, you have to be flexible and fast to take advantage of various lending opportunities in the marketplace. They are not restricted to the firm criteria of the traditional loans hence can accommodate a lot of people. Moreover, they are usually friendly and can offer financial aid whenever you need some advice.

Hard money online loans are  usually advantageous as centrally to the banks, they are more flexible, one can set terms that he/she can afford to meet and with mutual agreement with the seller, the loan is processed in one to two days.

You might have to go through several lenders before you meet the one that suits your specifications hence it is recommendable to go through a hard money lending guide as well as do some simple research online to find the many companies that offer hard money lending.