Many people call hard money lenders legal thieves, loan sharks, people who deal out of the back of an alleyway and other unsavory terms.
Anyone who thinks like this most likely has never dealt with one.
Hard money lenders can be the life saver you've been searching for if you're facing foreclosure or bankruptcy.
Yes, their interest rates range between 17 and 25 percent, sometimes greater if the risk is extremely high.
In addition to high interest, 2 to 10 origination points are typically added into the loan amount.
Pre-payment or exit fees may be applied to the loan in some situations.
The saving grace is hard money loans are short term 2 months to 3 years and can close in a very short time.
One of the best things about most hard money lenders is most don't care so much about your personal credit history, your income, or business references.
Loans are made upon the as is value of the collateral or value of your property.
Try to find a traditional bank or financial institution that doesn't put your entire life under a microscope, practically demanding to talk to everyone from your parents to your fourth cousin, twice removed.
A commercial hard money lender typically lends on income producing properties such as apartments, office, retail, self storage facilities and mobile home parks, anywhere between 60 to 75 percent of the value of the property.
Written offers occur within one to three days after reviewing your proposal.
Traditional banks can take up to two months to approve your loan and for some, that's too little, too late.
Hard money are private lenders who either lend you their own money or get it from places such as private equity groups, hedge funds, mortgage pools, or deep pocketed individuals.
Common since underwriting techniques are present and naturally the higher the risk means higher rates for you.
Locating hard money lenders can be challenging however, here is a suggestion or two: To find a lender you can check you favorite search engine under "direct money lenders" If you would like further define your search you might want to try to include the specific type of property you are looking to finance.