Hard Money Loans for Real Estate purchases and refinances (also known as Private Money) have become more popular. Ever since lending institutions tightened their loan requirements, frustrated Brokers, Realtors and their buyers and investors have been seeking a viable and reliable source for their real property buying and investing. Getting approved with a traditional or conventional lender does not only require extensive evidence of credit standings, verification of income, good debt to income ratio and a lot of paperwork, but it can also be a painfully slow process – even with great credit scores and solid income. This is where we come in and help with Hard Money/Private Money.
Only TWO main qualifications for a Hard Money loan:
1. Equity or a decent down payment.
2. An ability to repay the loan.
What is Hard Money Lending?
A hard money loan is simply a short-term loan secured by real property and funded by a private investor(s). The terms are generally 12 months, but they can be extended. Monthly payments are usually interest only with a balloon payment at the end of the term. The intent is that within the term of the loan, the borrower corrects the issues that prohibited them from obtaining a conventional loan. If that goal is not achieved, the hard money loan may be extended or refinanced into another such loan.
Because hard money lenders are primarily concerned with the property’s value rather than the borrowers’ credit, FICO scores do not present a problem. Borrowers with damaged credit, even foreclosures and bankruptcies can still qualify for a hard money loan if there is decent equity in the property or they have a good down payment for a purchase.
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California Real Estate financing only. Minimum loan amount starts at $150,000.