Hard Money Lenders Are Your Solution to Quick Loans and Emergency Funding Sources
==== ====Check out the link below for more resources:http://hardmoney.toufangle.com==== ====What are hard money lenders?Private investors whom lend their money out high rates that local banks wont do.Hard money loans are easier to get and funded very fast at lighting speed. It is referred toespecially with real estate investors as asset based lending. The collateral on the loan becomesthe real estate. They are far from conventional loans, since the underwriting guidelines that privatemoney go by are far different from your local banks.For those seeking emergency funding sources, or that have situations that are time sensitive andneed to close quickly in days not weeks for their money, hard money is a solution period! Creditscores or bad credit is not a factor for most cases, although there are hard money lenders that dolook at a borrowers credit history and are credit driven but for the most part they are not creditbased lenders.Based upon their own lending criteria, HMLs lend money on a short-term basis 6 months to 1 yearto borrowers who use it for a variety of profitable purposes. These may include the following realestate loan types: bridge, refinance, development, acquisition, rehab, etc. Since Hard Money ismore expensive than traditional sources (14%+ interest rate and 2-10 points+ in origination fees),borrowers usually have a financial gain from using hard money, so the high interest or pointsusually is offset by the financial gain.The loan cost is not an issue when they may make $150k andpay $30,000 to use their money, would you use it if you could make $150k and pay $30k to useit...What Type Of Terms Can You Get With Hard Money LoansThese types of loans will vary from private lender to lender. Upfront application fee, due diligencefee and commitment fee may be charged and vary from lender to lender again. Generally they willfund a loan for 50% LTV on raw land and up to 50-70% LTV on the finished product, at an interestrate of 14%+ (depending what area of the country you are in at times ) and for a period of sixmonths to three years. They will also charge between 2-10 points as an origination fee, to be paidout of proceeds. Can be interest only or amortized.Some lenders will fund interest, origination fees, rehab money, etc.; others will not. Ultimately,when selecting a HML, borrowers will need to understand how these options fit best into theirplans.What Makes Private Money A Great Financing Source And Option?
Your local banks, credit unions fill a definite need for low cost money. Borrowers would love to usethem for all of their needs and real estate deals. However, there is a market out there thattraditional lenders cannot loan money on. That is where private money comes in and why theyexist. They fulfill a need that local banks cannot fill due to government regulations, stricterunderwriting guidelines, lower risk profiles, longer funding timeline, etc.Top 10 Reasons To Consider When Deciding About Hard Money Loans1. SUPER FAST SPEEDCan close in 5 - 14 days after they get all necessary documentation, banks can take up to 45-60days.2. DOCUMENTATION REQUIREMENTS ARE EXTREMELY LOWRequire documentation but not nearly as much as traditional lenders, fund based on the value ofthe property only and not the borrower credit standing.3. BAD CREDIT NOT AN ISSUEBankruptcy, foreclosure and a FICO scores under 490-600 are no problem. Traditional lendersalmost always require a great credit history.4. VERY FLEXIBILEFlexibility with loan structuring..awesome! Terms, interest reserve, draw schedules, cash out,financing carry, etc5. GAP/BRIDGE FINANCINGHMLs are usually very experienced real estate lenders who understand that projects do notalways follow the given plan. If a gap in funding exists and the loan and supporting documentationmake sense, HMLs will typically fund. Whereas, ILs guidelines are typically not flexible and theyturn down gap loan requests if borrowers get off schedule.6. FOREIGN NATIONALS LOANS NO PROBLEMForeign nationals can get a loan with a hard money lender but will be difficult to get a loan with atraditional lender who have problems lending to nonus citizens.7. WILL LEND ON HIGHER RISKY DEALSChurches, non-profit are not a problem with hard money lenders, but are with traditional lenderswho are concerned if they have to foreclose on a church loan, and the bad publicity they willreceive.8. PERSONAL GUARANTEES NOT REQUIRED
Loans based on the value of the property so personal guarantees are not necessary. Local banksalways require personal guarantees.9. FLEXIBLE LOAN TO VALUES (LTV)They are more flexible then traditonal lenders being that they will decide what Loan-to-Values(LTVs) they will accept based on their affinity for the project, cross collateralization, possible equityparticipation, etc. Traditional lenders will turn down loans asap if ltvs are to high high.10. SUBORDINATE LIENSHard money lenders will lend on a 1st, 2nd, 3rd or lower position, as long as, the value of theproperty is there. Local banks may do a 2nd, and hardly ever a 3rd. Typically, Traditional lendersalways want to be in 1st position.What Should You Expect With A Hard Money LoanIf you have a fantastic deal with a super LTV and cant go to a local bank because of bad credit, orneed for funding in two weeks or faster. Now that you know and are informed about what is hardmoney and and value of concept of it you can send the loan to a private lender. You will pay moremoney for the loan bottom line then your local banker, but will be easier and quicker to close yourdeal.Each deal is on case by case basis, unique; terms vary and each structure of a deal can bedifferent. Lender criteria adjust based on the specifics of each deal, so borrowers will need to beflexible.Here some things to keep in mind when applying for a hard money loan:* Title insurance is a must* All delinquent taxes, judgments, etc. and other liens on the property will typically be taken out ofthe proceeds unless specifically excluded.* Insurance, typically, will add the lender as co-insured* Fund control is always set up on construction, development and any loans which have budgets *Borrower will pay all closing costs, fees, etc. out of proceeds* Many lenders require the property be put into a single asset LLC, which the loan is made to* Borrower should be prepared to assign rents* Interest, in most cases, at least partly will be reserved or prepaid* Some HMLs require an upfront application fee, due diligence fee and commitment fee. Makesure you understand these fees and how they will be used and if they are refundable* Almost all lenders require borrowers to have money in the deal. Additional collateral may berequired by cross collateralize other properties to keep the LTV acceptable.copyright@2008Financial Loan Consultant... Hard Money - Hard To Place Loans Specialist
Do hard money commercial and residential loans nationwide, do alternative business financing forany type of business on a national level as well!Specialize with restaurant owners whom are opening a restaurant and cannot get a loan becausethey are just opening up, my product was created to help you if you are opening a restaurant, andcould get funded 48hrs after opening your restaurant.Call now 24hrs voice mail at 718-512-8587Visit hard money business loans section at Restaurant FundingArticle Source:http://EzineArticles.com/?expert=Edwin_De_Leon==== ====Check out the link below for more resources:http://hardmoney.toufangle.com==== ====