The Best Advice About Businesses I’ve Ever Written

Basic Facts to Learn Regarding Hard Money Loans You have heard about hard money loans and you want to grab the opportunity to make some money. However, you don’t know what to expect from this alternatives, so here are the basic facts you have to know. The biggest gain of hard money loans is how the lenders are always concerned of the property value and not personally on you. This means that the property gets you the loan and not your present credit status. Hard money loans are a form of loan that can more or less have one to six months life, but you can get up to two or more years extension. Not like the average banks, the lenders can have you approved (or not) in as little as two days. Be prepared to answer as to why you opt for a hard money loan instead of a traditional loan. There could be several reasons why you considered this kind of loan and one of them is the urgent need of the money since you want to grab one great opportunity. Hard money lenders want to know the type of collateral, the property location and approximate value, the amount owed, and the exit strategy or how you will back the loan. Most firms aspire your business and they will work with you to acquire you 60 to 75% financing. You can take 100% financing in some cases when you put additional assets into the deal. These private companies usually won’t get 100% of the property value so the low loan to value is offered as an option to protect the lender in case of default.
Finding Ways To Keep Up With Lenders
You need to be prepared since hard money loans have much higher interest rates than traditional loans, which could be 10 to 15% depending on the overall risk. The lender will set points or origination percentages also between 1 and 5% of the loan that is assessed at the close of the deal. However, the higher interest rates, flexibility and quick turn-around of the loan often offset all the paperwork and time involved when dealing with traditional banks.
Overwhelmed by the Complexity of Loans? This May Help
You should expect that some hard money lenders include a pre-payment fee or an exit fee for the loan while others charge nothing. Make certain that you precisely know the terms of the proposed loan prior to engaging with any lender. One thing you can have is a detailed letter of intent so that you and the lender will understand what each party exactly expects. It is very important to do some in-depth research in order to be familiar with the hard money loans. You can talk as well to those have experience with this type of loan or ask your lawyer to help you. Remember that the web offers plenty of information that you can use to your advantage.