Acquiring Hard Money from a Hard Money Lender

Providing hard money loans are not one of the main functions of a bank. There are several forms of customer’s credits and their respective procedures in banking. The result is usually identical. The client gets the hard money from a hard money lender after completing all the necessary conditions.

It is very important to remember the process of getting such loan from hard money lender. You need to know how long will it take for a customer to finish all documents. Generally, processing of all paper works is quite a lot. On average, the customer takes three to seven business days to complete the paper works, including 4 meetings with different banks.

Furthermore, a recent study shows that almost thirty percent of the positive decisions on loans is reviewed by the credit committee after reconsideration.

Banks and some investors that have great experience in their activities have developed their techniques in greatly simplifying the process of getting hard money loan by any customer. In some banks, the decision about providing hard money loan secured by real estate like apartments, land, cottages, country houses, and nonresidential premises can be made within 2 business days, and the set of provided documents is limited to a minimum. This further attracts real estate owners to avail such loans.

The credit worthiness of the borrower is evaluated, not on the basis of reference, but based on his real income. Lenders of hard money strive hard to help their customers at any stage of cooperation and to create for them the most comfortable conditions. In some lenders of hard money, there is an opportunity of flexibility in the formation of a payment schedule and introduction of a phased repayment of the debt or partial early repayment of the hard money loan. Some lenders of hard money evaluate the value of the property on the basis of information based on its fair market value at the time of the hard money loan.

The requirement of compulsory insurance of the borrower’s life is waived by a hard money lender when he feels there is no need for such. In recent years, many lenders provide loans to borrowers without collateral, the financial crisis that hit the economy changed the scenario. Financial institutions have made the necessary adjustments, and borrowers can get hard money loan only by securing it by real estate. Today, you can conveniently get a hard money loan in a short period of time if you have it secured by a real estate.

Hard Money Lenders: A Friend to New Investors

Most of the time, people think that real estate is one of the most sophisticated and complex careers to start with. Hence, a lot of people tend to avoid this line of business when they can. However, we are not aware of our hidden potential that might lead us to the new career path. You can plan ahead of time and get into real estate investment. Hard money lenders in the US provide coaching and financial assistance to new investors wanting to know more about hard money lending.

Hard money lenders have always made it clear for new investors to get in close connection with what comes in as a sound deal. You can search for best of things in your neighborhood. A good property means the one that is able to attract potential buyers. The lenders would always recommend new investors to deal in residential properties because they are very easy for an investor to sell the house at a profitable rate within a shortest possible time. Other kinds of properties that new investors can search include developmental and commercial properties.

The best money lenders have some exceptional features like they trust you for what you see. Also, you are not required to submit long list of past financial histories. Moreover, you are never asked to file your loan application, by standing in long queues outside the conventional lenders like banks. There are so many clients that were refused loan application, only due to their bad credit scores or their low funds in banks. These clients were warmly welcomed by lenders of hard money because they are supposed to come with good property deals. When dealing in this kind of business, you have to be all in a mood to do this transaction with full enthusiasm and the rest would be done in your favor.

Hard money lenders are working for last two decades, and they have changed how people think of the real estate world. Today, everyone who feels a little interest for marketing or sales can enter into this business. Everyone wants to find a chance to be prosperous and work for the goodness in their lives. When you decide to work with these lenders, things are totally in your control because you are supposed to plan for good things in your life. Hence, the authorities of conventional lenders are being challenged because people are aware of the ease of dealing with these lenders.

Hard Money Lenders: Get To Know Them

Hard money lenders are private investors whom lend their money out to borrowers at high rates, which banks would not do. These lenders provide loans to people who need money and have a property to secure such loan.

Hard money loans are easier to get than bank loans, and they are funded very fast. These loans are very common especially to real estate investors as asset based lending. In hard money lending, the collateral for the loan becomes the real estate. These are very different from traditional loans because the underwriting guidelines are different from banks.

Hard money is the only solution for those seeking urgent funding sources. Also, these loans are helpful to those who have situations where time is important and need to close quickly in a matter of days, and not weeks, for their money. For hard money lending, credit history is not a factor that determines the approval of a loan application. These lenders are not credit based lenders, although there are some that do check the credit scores of the borrower.

Hard money lenders provide money on a short term basis, normally 6 months to a year, so that borrowers can use it for various profitable purposes. Hard money loans may include real estate loan types such refinance, development, bridge, rehab, acquisition and others. Investors who use hard money to finance their projects usually have financial gain using hard money. The interest rate of hard money is usually at 14 percent and above and 2-10 points in original fees. Because hard money are expensive than traditional sources, borrowers always make sure that they have a financial gain using hard money. In that way, the high interest or points usually is offset by the monetary gain.

Hard money loans vary differently between lenders. Fees and charges such as due diligence fee, commitment fee and application fee, may be charged by lenders and varies significantly between lenders. Lender will generally fund a loan for 50 percent loan-to-value on raw land and up to 70 percent loan-to-value on the finished product. Lenders will fund a loan at an interest rate of 14 percent for a period of six months to three years. Also, borrowers are charged between 2-10 points as an original free, which is to be paid out of proceeds. Lastly, when choosing hard money lenders, borrowers need to understand how different options fit best in their plans.

Hard Money Lending: Another Good Financial Option

A lot of people are forced to turn to some unique, nonstandard and risky option when the bank or financial institutions solutions don’t work. These is  commonly known as hard money lending and you’ll most likely be working with a hard money lender specializing in that practice. This type of financial solution is not very unusual these days especially when a lot of people are already forced on the wall. This has been the option for many people, and it has shed a fairly unexplainable and unfairly assigned shady and risky status.

This kind of financing is very easy and direct, just like other companies that want to make a small profit. Today, even home owners will have a hard time acquiring a loan from banks and other traditional financial companies. When banks and financial institutions decline the loan application of homeowners, they will obtain a hard money loan. This type of loan is a secured loan where an asset is used as collateral to the loan amount.

The hard money lenders are the people or companies that offer these asset-based loans. These companies can produce the amount of money for a short time period. Moreover, they demand slightly higher interest rates than banks offer. Furthermore, the amount of loan is determined by the lenders based on the current market value of the asset pledged as collateral.

The amount of money that the borrower will get from the loan is usually 60 to 75 percent on the market value of the property. This value refers to the amount for today’s purchase price of the asset. It could also mean the amount of money that the lender can expect to earn when the property is sold in case of a loan default.

The hard money lending is not always the first option for many people because these loans are rather more expensive than standard loans. This is because they are not being determined by traditional credit tips that protect traders and banks from high interest rates. Most of the time hard loan lenders do not need proof of income or check the credit history of the borrower. It is the property that the lenders care about when a person applies for such loans. Because of this ease of application, hard money lenders have higher interest rates and default costs because they think it is justifiable.

People would end up getting hard money lending as a tool to meet their financial need. However, debt is a serious matter. Any hasty decision in getting this kind of loan can end up to foreclosure of the property. Hence, make sure that you evaluate your capacity to pay and set a limit on the amount that you will borrow in this type of financing.

How Hard Money Lenders Can Help You

Real estate investors everywhere depend on private money loans in for their property investment financing. Oftentimes, it is not easy to acquire funds from the hard money lenders.  Some of these lenders understand the strategies in reselling and rehabilitating of investments, which are often applied by many investors of real estate everywhere.

Many of them get their funds from various resources such as private money lenders and bank lenders.  Bank lenders get money from various loans offered by banks. These lenders offer loans to interested investors, and then sell the legal documents to a financial institution. Basically, the capital grows by getting more funds through investments.

For instance, the financial institution such as the Wall Street has terms and conditions that all investment must be eligible for. Otherwise, the request or application for loan will be denied. The guideline for such does not really let any fix on funding or properties flip.

On the other hand, the private money lenders are completely different from bank lenders because they do not sell legal papers to third party financial institutions.  These private lenders are a group of investors who invest to get huge interest rates. This is the major reason why they invest in real estate. Oftentimes, their rules regarding investment are favorable and agreeable to interested investors who want to flip and fix their properties.

Unfortunately, one known disadvantage with private money lenders is that they are most likely to change their guidelines for property approval. It is for the reason that they are private, which gives them the right to change their rules and rates whenever they want to. For this reason, private hard money lenders should not be something people can really depend on.

Many investors of real estate find hard money lenders a difficult problem to handle. For an investor who is still a beginner, he or she might end up with frustration, and may lose hope in winning the game in real estate. To be successful in real estate investment business, you must find the right lender. This is an important factor that real estate investors must consider. A lender that does not change his rules and rates is way much better.

Many of these interested investors have a real estate background and interests. Typically, they do intensive research about the property prior to funding the loan. They strictly adhere to their own property approval guidelines; therefore, with this type of lenders, you do not have to worry about any sudden changes in their terms and conditions regarding the real estate investment.

Overall, you will be successful in real estate investment business if you have established a good business relationship with the money lenders.

The Basic Requirements of Hard Money Lending

Hard money lending is monetary tools offered by hard money lenders to investors who need a substantial amount of money in a short period of time. Hard money loans are, in some ways, the same as conventional commercial loans, but do not have a rigorous process like banks and other traditional financial institutions. These loans are based on the value of the asset or property offered as security. Hence, most hard money lenders are not concerned about the credit rating and monthly income of the borrower.

The main concern of hard money lenders falls on the property itself. The hard money lenders usually approve an amount of loan that is equal to 60 to 75 percent of the value of the property involved. A third party appraiser determines the value of the property pledged as collateral. The appraisal of the property is usually dated within six of the loan approval.

If you urgently need money and your bank denies your loan application, then  a hard money loan is a great. Although getting this type of loan is easy, you need to prepare some important things in order to expedite the loan process a bit. Below are some important requirements that you should remember before applying for a hard money loan.

The executive summary

The executive summary is very important when a borrower is applying for a hard money loan. The executive summary contains important information that will help convince the hard money lender why your asset makes a worthy investment. The borrower needs to complete a form that lists down all his experiences, most updated resume and colored pictures of the property involved.

The title report

The title report is another very important requirement when availing a hard money loan. It is a must that borrowers have a clean title record of their property. All hard money lenders always make sure that the current title of the property can appropriately be documented. The title report can be secured from local title companies. This report can be issued in a matter of one week, and the price varies from $500 to $2000.

The evidence of the insurance

Most hard money lenders require the borrowers to maintain the insurance on the property. Also, the lender will be the one to specify the amount that the borrower should be able to borrow. In situations where the borrower’s business is located in a commercial property, the lender will require additional coverage.

Hard money lending does not only cover existing properties. It also covers a property that is still under construction. This is referred as new construction loan.

The Benefits of Seeking Help of Hard Money Lenders

Hard money lenders make loan application easy for cash-strapped investors of real estate to complete deals and make huge profits. These lenders are nontraditional financiers that are great options next to the established lending companies like mortgage companies, credit unions and banks. These lenders provide money to an investor regardless if the investor has a poor credit score.

These lenders are not concerned about the credit rating of the borrower because they are offering a type of financing that is asset-based. The financing that they offer is called hard money loans. Normally, the lenders would assess the after repair value of the asset or property for which the loan is being made. Once the lenders think that the property has a wonderful potential, and it can get a good price after a being repaired and renovated, then the loan application are approved.

You should consider getting hard money loans if you have difficulty securing financing for your investment properties. There are many benefits of borrowing money from hard money lenders.

When you avail hard money loan, the lenders can process your loan application in a matter of few days. Some lenders can even accomplish the task within a day. This means that you don’t have waited for a long time in order to determine the result of your loan application. You can get the funds that you need as soon as possible because your application was processed fast.

Lenders of hard money are easier to deal with than traditional financial institutions. When applying for a hard money loan, you don’t have to wait for a long time just to talk to the loan officer. Moreover, the processing panel will not keep you waiting for months to have a decision on your application.

There are lesser paper works to deal with in applying for a hard money loan than bank loans. Most lenders only require the appraisal of the asset to validate the eligibility of a loan.

If you are thinking of renovating your property, then obtaining hard money loans from lender are very beneficial. These lenders are willing to give coverage for your property’s repairs. Hence, you can make huge profits without spending your own money by using hard money to finance the renovation.

Hard money lenders have varying terms and interest rates are higher than the loans from traditional institutions. Thus, it is best to educate yourself about hard money lending in order to avoid confusion on your part.

Top Reasons to Consider About Hard Money Lenders and Hard Money Loans

A lot of investors who run out of luck with loan with loan applications in banks and other traditional financial institutions would find themselves looking for other options. Most of the time, people who are pushed to the wall would run to hard money lenders.

These lenders offer a type of financing called hard money loan, which is asset-based. Most of the time, lenders of hard money would assess the value of the property for which the loan is being made. If lenders think that the asset to have a great potential, then the loan application is likely to be approved.

There are various reasons why people consider getting hard money loans. They are the following.

Application process is fast. The loan amount can be made available after 5 to 14 days after applicant submit all important documents.

The required documentation is very low. The funds are based on the value of the property. Hence, only the property matters most for hard money lenders, unlike traditional lenders.

Borrowers with bad credits are welcome. Foreclosure, bankruptcy and FICO scores are not a problem when applying for hard money loans.

Foreign nationals are allowed to get a loan. Non-US citizens or other foreign nationals can easily get a hard money loan, but they will be have a hard time getting a loan from traditional lending institutions.

Lenders of hard money will lend on high risky deals. Non-profit organizations and churches can avail of hard money lending too. Such organizations are not usually granted a loan with traditional lenders, which are concerned to get bad publicity when they will foreclose a church loan.

Personal guarantees are not required. Hard money loans are based on the value of the property. Therefore, there is no need of personal guarantees unlike banks that always require one.

They offer flexible loan to values. Lenders of hard money are more flexible than traditional lenders because the lenders of hard money will decide what loan to values will be accepted based on their interest for the project, equity participation and more. Banks and other traditional lenders will reject a loan if the loan to values is too high.

Subordinate liens are acceptable. Hard money lenders will lend money regardless of the position as long as there is the value for the property. Banks may lend on a second, but not a third position. Traditional lenders always want to a first position.

The Right Way to Deal with Hard Money Lenders

Hard Money Lenders are getting common day by day and many people have found that that communicating with these hard money lenders is really difficult. However it is not the partial truth. There are dozens and dozens of hard money lenders around and so is the various types of borrowers so if you have come to know from someone that he did not had a good experience with some hard money lender then do not jump to conclusions that all the hard money lenders are the same. The question arises even if they are not same then what is the right way of making a deal with the hard money lender?

There are number of questions the borrower should know like he may see that the borrower is having the knowledge or the experience to move forward? Or the borrower may be able to succeed in the project he seems to borrow the money for? Does the borrower has a strong character and would be able to take himself or the company out of the financial chaos?

So these are the only few concerns of the lenders and if you can answer these questions according to their satisfaction then making a deal with them is not a problem at all. So before going to these lenders make sure you are prepared a bit. See the following points to know more about it.

1. Clarity

You should have clear statement, sort of a summary that why you need the money and how will you be able to give it back. Hard money lenders do not like going back from the start of the story to your tragedy. You need to have a plan in which you should have a win-win strategy which should be precise as well as concise. Because if you will make it complicated, you deal will become complicated as well.

2. Check your Facts

Even though you are in a complicated situation and you are not too sure what to do. Before you rush to do the hard money lenders, prepare yourself with all the facts and update information related to your business or deal or for whatever purpose you are about to borrow the money or else the lender may consider you a disinterested borrower. Make a file of all the facts with your plan and give it to lender if you need a valuable service.

With these points you will surely impress the lender and would make a good deal.

The Advantages of Hard Money Lenders

Hard Money Lenders are individuals as well companies which provide loans. Their policy is that they provide the loans on urgent basis but for a short duration and they charge a slightly higher interest on it at the time of return. The Hard Money Lenders are rising day by day as the needs of the people are also rising.

There are few Hard Money Lenders which are on very small scale in a single town or village while there are some lenders that are scattered in large metropolitan cities. Many of these operate on such a large scale that they also have international clients besides having the local ones.

There are plenty of reasons why people seek Hard Money Lenders; some of these are as follows:

1.    Quick Process

The process of lending the money is very quick. They do not require any large documentations or paper work from their customers. This makes the task of the borrower quite easy as he is not required to prepare any documents before lending the money and promptly go the near Hard Money Lender to get the desired money.

2.    No Checking is Done

The Hard Money Lenders do not check the borrower’s bank balance, credit score, income or any past financial activity. Since they do not ask any questions, so people find is quite attractive especially in the distressing fiscal conditions.

3.    Speedily Handed the Money

The money to borrow is given within the day he asks and sometimes the other day. Since it is so quick and people realize that they are so close to their dreams so they borrow it promptly.

4.    Unlike the traditional Lending Institutions

When are turned down from the formal lending institutions as their application may not have fulfilled their criteria, in such situations these Hard Money Lenders seems like a blessing and unlike the traditional lending institutions they lend the money without any questions or applications.

5.    Flexible

The Hard Money Lenders are very flexible according to the needs and desires of the borrowers. They hardly resort to foreclosure or prepayment penalties.

With so many advantages, the people who are in financial crisis or suddenly faces some monetary losses finds this to be the best option and avail this at this soonest to come out from their financial disaster.