Hard Money

Financing, Hard Money Lenders, Private Money
1

Hope everyone is having a wonderful day!! I am looking for a hard money lender as well as information on how hard money works. What are the typical interest rates, repayment schedule, down payment requirements…basically a general overview of hard money as well as information on anyone who offers hard money.

Thanks

2

From Investing Glossary on this site

Hard Money Loan - A loan that is underwritten with the condition and value of the property as the primary criteria for approval. Secondary issues may include the credit of the borrower, the ability of the borrower to repay the loan and/or the ability of the borrower to manage the property or successfully complete a rehab and sell the property. Owner occupancy, debt ratios and other issues are seldom a factor. Appraisals rather than purchase prices are used to determine value. Cash out purchases are often allowed and are another key benefit. These loans are usually approved within days and are often funded in two weeks or under with times as short as two or three days not uncommon. The cost for the benefits of speed of funding, lax underwriting and other advantages is typically a moderately high interest rate (usually low to mid teens) and high points (usually 5 to 10).

There is also a Hard Money lenders link under Investor Resources to the left of this post.

3

Call Citimortgage. They do up to 10 financed properties.

4

Hard money lenders rates and terms vary from state to state. Most charge around 16-18% interest, with interest only payments. Loans vary from 6 months to 3 years, but typically lenders like to keep loans less than 12 months so they can keep the money cycling through and keep their investors happy.

Hard money lenders are collateral based and the property being purchased is the most important part of the deal. They want to know whether it will resell if it happens to foreclose and whether the borrower is going to fix and flip or be able to rent it out if he holds onto it. HML normally don’t rely on credit, financials, tax returns, ect as they use the home itself for collateral.