Borrower Program
Advantages
Hard money loans are loans
collateralized by equity in real estate.
Generally used for business purposes, hard money
loans are often used as bridge financing for
real estate investments, business real estate
asset purchases, refinancing and foreclosure
help.
Hard Money Loans have three
distinct advantages over bank loans:
- **
Hard money loans can be closed (funded)
quickly.
- **
Lending decisions are made based more on the
value of the real estate than on the
financial status and credit of the borrower.
- **
Hard money lenders have less lending
criteria and will fund projects that
traditional banks and lenders will not.
In exchange for taking greater
risks and funding so quickly, expect to pay
substantially more than you would for a
traditional mortgage. Hard money rates range
from 11% to over 20%. Points generally run
between 5 and 15; the greater the risk in the
project and/or the borrower, the higher the
price.
Making a Hard Money
Request
Providing clear information
about the property you wish to collateralize for
a hard money loan will help you get answers
fast. When making a hard money request, include
the following:
FOR A
PURCHASE, INCLUDE:
- ** The
purchase price of the property
- **
Purchase agreement between you and the
seller
- ** A
recent written appraisal within the past 6
months.
-
Don’t guess at the value—you can’t get hard
money funding based on your guess.
- Hard
money will get you up to 55% of the purchase
price. Explain where the rest of the money
will come from. You will need to come up
with the closing fees and must have a vested
interest in the property. A down payment,
secondary financing or culmination of the
two may be used to satisfy the balance.
FOR A
REFINANCE, INCLUDE:
- The price
you paid for the property initially and the
date you bought it
- A recent
written appraisal – within the past 6 months.
FOR EITHER
KIND OF HARD MONEY REQUEST, INCLUDE:
- A
personal or corporate financial statement
with your assets and liabilities listed
- If the
property is income producing: cash flow
information may be required.
The hard
money lender will want to see that you can
afford the loan you are asking for, pay your
other bills, and still have a few dollars
left at the end of the month.
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