What is hard money lending?
These lending organizations provides funding based on the value of property you own, and collateralizes them for the funding provided. Typically, money is funded by individuals rather than larger corporations that take money from people and lends them. The lending amount is determined by the value of the property or asset that you own, and depends upon the property market to a great degree. These lenders are preferred by people, who do not qualify for regular loans or have a bad credit. From a company's perspective, hard lent loans are low-risk in nature where the interest of the investors are secured by collateralizing the property, and in the eventuality of non-repayment foreclosure can be obtained or the property can be sold to recover the money lent. A hard money lender has different terms and conditions as opposed to regular lending practices.
What are the terms of hard money lending?
The terms posed by these lenders differ from company to company and person to person. They can be even friends or acquaintances that you could have just met or business that operate in your area would divert funds for hard lending, or even a colleague of yours in the office, who could agree for hard lending. Some companies would require a credit check and reliability for dispersing their loans, whereas others would require referrals or a repayment guarantee from your bank. What they look for, is the after repair value of your property. Generally 60-80% of after repair value is lent out. A bond is executed between the money lender and buyer that finalize the collateralization of the property to the loan amount and the number of default instances with additional interests if any is mentioned out in the bond. The tenure would range anywhere from 6 months (short-term) to 5+ years (long-term).
Who seeks out these money lenders?
Hard money lenders are preferred by people who have difficulty in getting a loan the other way around, or who intends to profit directly out the property that he owns like renting. Leasing the property, and providing warehouse services etc. These additional incomes help to pay off a portion of the loan amount. People with no credit card can apply and qualify for a hard loan, as all these lenders look typically ask for a six month bank track and if possible a credit check. Bad credits are not given importance by hard money lenders as their investment capital and the accrued interest is safeguarded by the worth of the collateralized property.
Some facts on hard money lending.
Generally thse lending organizations taking more time to process your loan application as they have to assess the worth of your property and get a credit check. The terms set in by hard money lenders can be flexible and talks on the terms and conditions can continue until both the lenders and buyers agree on a general repayment and default terms and conditions apart from the regular company terms.
These lending organizations provides funding based on the value of property you own, and collateralizes them for the funding provided. Typically, money is funded by individuals rather than larger corporations that take money from people and lends them. The lending amount is determined by the value of the property or asset that you own, and depends upon the property market to a great degree. These lenders are preferred by people, who do not qualify for regular loans or have a bad credit. From a company's perspective, hard lent loans are low-risk in nature where the interest of the investors are secured by collateralizing the property, and in the eventuality of non-repayment foreclosure can be obtained or the property can be sold to recover the money lent. A hard money lender has different terms and conditions as opposed to regular lending practices.
What are the terms of hard money lending?
The terms posed by these lenders differ from company to company and person to person. They can be even friends or acquaintances that you could have just met or business that operate in your area would divert funds for hard lending, or even a colleague of yours in the office, who could agree for hard lending. Some companies would require a credit check and reliability for dispersing their loans, whereas others would require referrals or a repayment guarantee from your bank. What they look for, is the after repair value of your property. Generally 60-80% of after repair value is lent out. A bond is executed between the money lender and buyer that finalize the collateralization of the property to the loan amount and the number of default instances with additional interests if any is mentioned out in the bond. The tenure would range anywhere from 6 months (short-term) to 5+ years (long-term).
Who seeks out these money lenders?
Hard money lenders are preferred by people who have difficulty in getting a loan the other way around, or who intends to profit directly out the property that he owns like renting. Leasing the property, and providing warehouse services etc. These additional incomes help to pay off a portion of the loan amount. People with no credit card can apply and qualify for a hard loan, as all these lenders look typically ask for a six month bank track and if possible a credit check. Bad credits are not given importance by hard money lenders as their investment capital and the accrued interest is safeguarded by the worth of the collateralized property.
Some facts on hard money lending.
Generally thse lending organizations taking more time to process your loan application as they have to assess the worth of your property and get a credit check. The terms set in by hard money lenders can be flexible and talks on the terms and conditions can continue until both the lenders and buyers agree on a general repayment and default terms and conditions apart from the regular company terms.