Often the first question asked whenever any type of loan is discussed or researched is, what are the rates? The rates, in this regard, are referring to the interest rates on the loan. It's an important question to ask because the interest rates on your loan will often be the biggest expense you incur when borrowing.
Do you know why property buyers prefer alternative financing? Big banks take long to approve loans and involve tons of paperwork. Luckily, there are various private money lending options available for those who need to close deals quickly.
It's easy to forget that not everyone is familiar with hard money loans and lenders. This seemingly mysterious industry and practice turns out to be new to a majority of the borrowers that use our site to find a lender. While we have discussed many details in previous articles, we thought it was a good idea to go back to basics and simply explain what a hard money loan is.
To those who haven't yet learned about hard money loans, they can seem confusing and a bit mysterious. Many real estate investors use hard money loans as the backbone of their operation as they provide ample, quick capital for purchasing property, repairs, construction, flips and everything else in-between.
Also known as consumer-purpose loans, owner-occupied loans are funds offered to finance a property which the borrower intends to occupy as a primary residence. Resource constraints, perceived risks, and low expertise are some of the challenges facing the private lending sector hence only a few provide owner-occupied hard money.
Have you heard about bridge loans? What is the definition of bridge loans? How do they work? Are they costly? What are the pros and cons? Do hard money lenders offer bridge loans? We answer all of your questions.
Hard money refers to a short term loan you can use to buy and/or renovate commercial or residential real estate. You can also use it for land purchases. The loan requires some asset to be put up as collateral, such as another property that you already own.
Most hard money lenders only accept first lien position when giving out the cash. So in case you default, they are the first to benefit from the liquidation of the property used as collateral.
Many people think that hard money loans are universally unregulated. Since their underwriting standards seem a bit relaxed, you can’t help but ask yourself, Are hard money loans legal?
Hard money loans for real estate investors are more likely to hurt the revenue from the property. So it’s wise to refinance the loan. Rates for conventional loans are a bit lower. How do you go about hard money loan refinancing? What options do you have?