What is a Hard Money Loan? A Hard Money Loan is a type of loan secured against real estate properties. These loans are the last resort, or short-term bridge loans, that are used primarily for real-estate transactions. Instead of dealing with banks, the borrower works with individuals or private companies.
Features of Hard Money Loans: This type of loan is taken for a shorter duration, and it is a great way to make money quickly (but it has lower LTV ratios and higher costs).
These types of loans are not executed traditionally, and the funding time frame is reduced to a great extent.
Terms of the hard money loans are negotiated between the borrowers and the lenders. These loans make use of the property as collateral.
Failure to pay these loans can lead to default; they become more profitable transactions for the lenders.
How does Hard Money Lending Work: Hard money lending has terms which are based on the value of the property that is used as collateral, not on the credit worthiness of the borrower? Traditional lenders like banks cannot make hard money loans .Those who lends hard money the private companies or individuals who see value in this type of venture (although it can be risky).
Hard money loans are often sought by property flippers who plan to renovate and resell the real estate which is used as collateral for the financing – often in a year or less. Most of the time, hard money loans are offered for a period of 3 years or less.
Special Considerations for Hard Money Loans: The cost is high but the approval process is easier and faster.
It can be faster than applying for a traditional mortgage with a bank. It does not have an underwriting process. That makes it hassle free. Private money loans are given by private organizations. If you are looking for hard money loans or lenders, start with a visit to www.lendinguniverse.com.
Company Name: Lending Universe