By Ben Needles
Who knows the term hard money?
Hard money is private money lending, money you will receive from individuals that will loan you their money against your real estate.
The hard money lender is the bank and the bank will loan you their money and put a lien against your real estate.
What is the difference between the hard money lenders programs and the bank across the street?
1. Hard money lenders can help investors with large loan amounts, while banks will makes it very difficult on the borrower to loan these large amount. So the loan would probably end up with an insurance company to loan you the money and the requirements are high.
2. Hard money lenders can fund any loan within a week, while for the banks it will take at least a month or even more.
3. Hard money lenders will ask for very little documentation, while the banks would ask for almost everything you have like taxes, income, assets, business license. As you can tell already the banks will definitely want to see more than a hard money lender to loan you some money.
4. Hard money lenders have guidelines but they can make exceptions without processing it through a whole underwriting team, while the bank need to go through different departments,underwriters and processors just to make an exception.
So to get a hard money loan is much easier then to get a loan from a bank because of the whole process.
The banks are big companies and big companies have many different rules inside their companies, so to get an exception for these rules is almost impossible.
That is why many investors would rather go with a hard money lender.
So now youre probably thinking what is the catch with the hard money lenders?
OK, so lets talk about all the reasons why you should not consider applying for a hard money loan:
1. Hard money lenders for their services will charge you 4 to 9 points on the loan,while the banks will charge you only 1 to 2 points.
Example: If you have a loan amount of $1,000,000 and your hard money lender will charge you 5 points up front then you will pay $50,000.
The bank will charge you 2% which is $20,000, that is a bit difference but under different circumstances for some people its still a great deal.
2. Because of the fact that hard money lenders will loan you money without showing your credit history and your income they will set the loans interest rate between 9% to 15%.
The banks will set your loans interest rate between 7% to 10%, again that is a huge difference if youre thinking about it but for these people that want the hard money loans its still a great deal.
You have to understand that most investors or home buyers can not qualified today with banks for any type of Loan.
Hard money lenders can get you the deals you want (foreclosures, reos) without even thinking about showing all the unnecessary documentation.
All you need to have is some money in your pocket if youre purchasing, and if youre refinancing than you need enough equity since the hard money lenders will probably go up to 65% at the most.
Also to find good hard money lenders its not so hard, its actually very easy because there are many private investors that are looking for real estate properties and notes to buy so they can make their points up frond and of course the high interest rate.
If you will think about it, its much better then put the money in the bank.
Example: If a hard money lender put $1,000,000 in the bank and the bank will pay him 5% a year- while if he will loan the money to an investor that want to purchase a property or to refinance a property, he will charge his 5 points and he will get 15% interest rate on his money, thats a big difference.
Good luck to you all investors out there.
About the Author (text)
Yanni Raz is a mentor for many in the Real Estate Mortgage industry, Yanni Raz is been tutoring many homeowners in California and help some also to save their homes.http://www.fidelitymutualmortgage.com
Types of Hard Money Loans
By Ben Needles
Are you familiar with the term hard money?
Hard money is money loaned to you by private investors, these private investors can be from anywhere but normally the hard money lenders would want to work within their own state.
So if youre from california than you want to find an investor in california.
What type of hard money loans the hard money lenders will accept?
The first type of hard money loans lenders are offering is construction hard money loan.
In construction hard money loan the lender will loan the borrower the money in stages.
Example:You own a land in los angeles california and on that land you want to build a house. You have the plans approved by the city of los angeles and youre all ready to go, now you need a hard money loan.
Why Hard Money?
Because it will be easier to qualify and get the money you need for the construction. You will call a hard money lender and give him all your information(the approved plans, your financials and your budget for the construction).
Then lets say the hard money lender agrees to loan you the money you need, but the way the hard money lender will Loan you the money is by stages.
and the stages are:
When your Contractor will finish the foundation, the contractor will get paid after inspection that is done by the hard money lender $10,000 for the foundation work. Than when your electrician finishes the electricity in the house, the electrician will get paid after inspection that is done by the hard money lender another $7000.
You understand the concept?
Everybody will get paid by the hard money lender by the completion of their work.
Why the hard money lender do that?
Because he want to have control of the money.
Private investors know the risks theyre taking and theyre still willing to take these risks only if they have 100% control of the money.
Why hard money lender will choose to loan money to investors and not homeowners?
This is a very good question that a lot of people should know the answer for.
The hard money lenders wouldnt want to have to take a homeowner out from his home because he didnt make the payments, but with investors its different, its 100% business and thats what the hard money lenders want.
What type of properties hard money lenders will loan money on?
single family residents, condos, townhouses, apartment buildings, hotels, motels, office buildings, shopping centers and many others.
What hard money lenders dont like, its land.
It will be very hard to find a hard money lender that will loan you money on a land, and the reason is because there is no income to lands.
Maybe you can get a hard money loan on a golf course or maybe a land that you about to develop something on, but raw land no way.
Today hard money lenders loan more money to commercial real estate investors rather then to residential investors and the reason is less risk.
Today the residential market is not going up, values of homes are actually going down by more than 30%.
So every day more foreclosures are coming out on the market and hard money lenders are smart enough not to participate in taking risks with homeowners.
Commercial real estate is still very competitive, investors are still buying properties, remodel and build new properties.
The commercial real estate market is still alive just like it was in the residential market 3 years ago and hard money lenders are still in the game.
Now theyre busy more than ever because the banks dont loan money that easy to borrowers.
So commercial properties rather than residential properties, and construction Loans.
Good luck
About the Author (text)
Yanni Raz is a mentor for many in the Real Estate Mortgage industry, Yanni Raz is been tutoring many homeowners in California and help some also to save their homes. http://fidelitymutualmortgage.com
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What Is Hard Money and How Will It Benefit You?
By yanni Raz
Have you heard the term “hard money,” but you’re not sure what it means? Perhaps you know what it is, but you’re unsure where to find it.
Hard money is financial backing from private investors in the form of a loan. It is one of the best ways to get a business project off the ground, but you have to know how to obtain it the proper way.
Hard money loans are often used for construction projects. Typically, the lender loans the money in stages.
For example, let’s say you own a plot of land and you want to develop it. A lender will agree to back you on the project. They will loan you a percentage of the money at the beginning of the project,more during the middle of the project and a final installment near the completion of the job.
Lenders often pay the contractor for their work directly. For instance, once your contractor completes the foundation of the new building, the lender pays them a specific amount directly. Then, when the electricians finish wiring the building, the lender pays them directly as well. All contractors receive their payments direct from the hard money lender.
Private investors often prefer this approach because it gives them greater control over their money and their investments. You don’t have to be a big real estate mogul to get hard money from investors.
Many investors are willing to support many different types of projects. Private investors will financially back projects like single family residences, condos, townhouses, apartment buildings, hotels, motels, office buildings and shopping centers. However, they will not usually invest in undeveloped land.
While hard money lenders are willing to loan to residential investors, they most frequently invest in commercial real estate. This is due to today’s instability in the housing market.
Commercial investments are simply a safer bet for recouping funds an investor puts into a project. Because of skyrocketing foreclosure rates in the modern housing market and property values dropping at record rates, there is considerably less risk involved for the investor in commercial projects.
Commercial real estate is a very competitive market, but hard money investors are willing to buy properties, remodel existing structures and even build new properties. The commercial real estate market is still alive and well. In fact, today’s commercial market is very similar to the residential market that profited so many people just a few years ago.
Hard money lenders are still in the game. In fact, they are busier than ever because banks are making the lending process more exclusive than ever due to a record number of people defaulting on their loans.
Knowing how the private lending process operates is half the battle when it comes to finding private investors for your commercial real estate project. With a little research and networking, you will find the perfect backer for the commercial real estate project of your dreams. The hard money for the project is out there; all you have to do is find it.
Yanni Raz mentors many in the Real Estate Mortgage industry. Yanni Raz tutors homeowners in California and helps many of them save their homes.
Hard Money Loans
News! You Can Refinance and Consolidate Your Debt Again
By yanni Raz
If you want to refinance your home and consolidate debt, now its the time. A group of private investors in los angeles California loan money to homeowners and real estate investors. These private investors also called hard money lenders are the bank.
Many of you tried to refinance with your local bank or a mortgage company in your area, but with no success. Now its possible again, but you have to know the conditions to qualify. You dont need excellent credit score or great income documentation, but you do need a lot of equity in your property.
Hard money lenders have been around for a long time, but no body ever heard about them. Real estate investors and brokers were working with them for years, but homeowners didnt know they exist. Today for many of us hard money lenders are the only hope to get a real estate mortgage.
Where can you find a hard money lender?
Many mortgage brokers and real estate agents are already in contact with one or two investors because of the fact that they just need them. If you will go online and look for a hard money lender, you will probably find a 100 private investors or more. You dont need to get fanatic about it, you just need to know what theyre talking about.
How do you know who is the right investor for you?
Normally of course you need to go with gut feeling, but in this case you need to be a little more careful then that. There are many hard money lenders that you dont want to work with. So what do you do? You ask questions. Here are some questions you will need to ask private investors when you call them:
1. The name of the company.
2. How long theyve been in business.
3. Get some name of people theyve worked with.
4. What are the interest rates theyre offering?
5. How many points they charge you.
6. Do they charge any due diligence fees, or any money upfront?
7. Are there any other fees included?
8. You want everything in writing from them, its very important.
You have to understand that you dont deal with big corporations. Hard money lenders are individual like you and me, but they have few millions dollars in their bank account. They would love to help you as long as you offer your real estate as collateral.
yanni raz
http://www.hardmoneyloans.org
Mortgage Help And Advice For Investors And Homeowners
By yanni Raz
Investors and Homeowners had a tough year. It started with the Real Estate market crash and it ended, so far, with thousands and thousands of foreclosures.
In the past year 267 banks have closed their doors and more banks are on the verge of ending their business. Let’s face it; the world is in serious trouble. How did we let the great economy we had collapse like this?
At this point it’s useless to pin point people looking who to blame. What we have to do is ask for help. Believe it or not, this help can come from homeowners and investors.
Let’s talk one on one. Homeowner: you have plenty of options to save your home and to get a good mortgage loan.
1. FHA Loans
2. Conventional loans with low loan to value
3. Hard money loans, also know as private money
mortgage loans.
Most homeowners don’t know how to save their homes. Many have lost their homes already not knowing they could possibly save it only if they had the knowledge and the tools to do it. No one is perfect and I’m not expecting you to go to school to study what to do with your home while you’re trying to save it, but you can hire a professional to help you.
I’m a mortgage broker from Los Angeles California. I specialize in helping people save their homes.
Lets help each other bring this great world back to what it was three years ago!
Know your options and hire a professional Mortgage or Real Estate broker to help you. Brokers are more knowledgeable than agents and brokers do work for you.
Why not to go to the bank next door? Banks are narrow-minded and they don’t know how to be creative. They go by the book. You want someone that gets things done, whether it is through conventional lending (banks), FHA mortgages (government loans) and the private money lending (private investors acting like a bank).
So many people don’t even know that private money lending or hard money loans are an option, therefore homeowners loose their homes with lots of equity in them.
I strongly believe that private money lending is the next thing for investors and homeowners. Qualifying borrowers has been an almost impossible challenge for banks.
The most important thing to remember here is that you do have options, make use of them and don’t join the scary list of homeowners who are losing their home to the foreclosure crisis.
Yanni Raz is a mentor for many in the Real Estate Mortgage industry and atm business. Yanni Raz is been tutoring many homeowners in California and help some also to save their homes.
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Hard Money Loans – The Answer to Your Problems?
By Nick Kent
These days, nothing in our economy is certain. In reality, many people and businesses are still in good financial shape, but for many others things have gotten quite a bit more difficult in recent times. Some people have had to close their businesses, and been foreclosed upon. Unfortunately sub-prime mortgage loans have gone the way of the dinosaur, due to the recent nation-wide crisis of which they were the center, and it’s become more and more difficult to know where to turn when your financial wellbeing is on the line.
If you’re one of the many, stuck between a financial rock and a hard place (or a foreclosure and a bankruptcy, as the case may be), it may be advantageous for you to look into taking out a hard money loan. Hard money loans are utilized by many people facing foreclosure or similar financial disaster, as the criteria for lending is more relaxed than a conventional loan. While your credit history is still taken into consideration by the lender, it’s typically not judged as harshly because the loan is given based on the value of real estate property you already own.
Due to the slightly higher risk to the lender when dealing with hard money loans, they are not provided by banks but rather by private lenders, and as such, the interest rates of these loans aren’t based on bank rates. Typically the interest rate on a hard money loan will range from 15% – 25% (a little less for bridge loans, which are similar, but not necessarily used in times of financial hardship), which means that you probably don’t want to look to hard money loans as sources of long-term financing. In fact, the term is often fairly short. Think carefully about whether or not you’ll be able to handle the loan, as the rates may increase to the legal state limits upon default, which can be as high as 25% – 29%.
Typically the value of a hard money loan is about 65% – 70% of the value of the property. This is known as the LTV (Loan-To-Value). The average LTV used to be higher than it is now, however due to rampant lender overestimation of property values in the ’80s and ’90s, interest rates were raised, and LTVs lowered. Now, hard money lenders typically want to be in the “first lien” position (meaning their lien takes priority over all others) on a given property, so if the value of the property isn’t enough to cover the existing mortgage, the loan will need to be cross-collateralized with another property. These cases are often referred to as “blanket mortgages.”
It’s important to review your financial situation thoroughly when considering taking out a hard money loan, and it might benefit you to talk to a certified mortgage planner before you make the choice to do so. In the right circumstances however, a hard money loan may be what it takes to tide you over, and keep your business from going under.
Rate1st is America’s largest online lending network, and provides a simple, easy, efficient way to shop for a loan. For more information on hard money loans please visit www.Rate1st.com.
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