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A Hard Money Loan is a specific type of asset-base loan financing through which a borrower receive funds secured by real property. Hard Money Loans are typically issued by private investors or companies.
A Hard Money Loan is simply a short-term loan secured by real estate. They are funded by private investors (or a fund of investors) as opposed to conventional lenders such as banks or credit unions. The terms are usually around 12 months, but the loan term can be extended to longer terms o 2-5 years.
Hard Money Loan rates can range from 7.5% to 15% with three- to 36 month terms. Points to close on Hard Money Loans typically fall between 2% and 10% of the loan amount. Pricing is Primarily based on rick, equity, and borrower experience (if a fix-and-flip).
1) Present the potential value of the property you want to purchase.
2) Present a clear financial plan for your home project.
3) Prepare additional documentation.
4) Protect yourself legally.
5) Remain in constant contact with your lender.
Because Hard Money Loans are funded by private investors, as opposed to traditional banks, they are often referred to as 'private money loans'. Even though Hard Money Loans are faster and easier to get than conventional loans., borrowers still need to go through the underwriting process and qualify for specific terms.
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