Hard money loans are an alternative financing option available for virtually anyone with equity in property or real estate, and a sound business idea. Texasmortgagecenter.com’s network of hard money lenders can find financing for your short-term real-estate secured loans. Hard money loans can be used to fund commercial loans, construction, bridge, land, residential, development, raw land and real estate loans. To get your loan started today, please fill our our Hard Money Worksheet.
Definition of Hard Money Loan
The definition of “hard money loan”, when referring to real estate financing, is a non-bankable loan, where the hard money lender approves the loan based on the value of the borrower’s assets and equity. A hard money loan is funded at a higher interest rate than a traditional loan. The borrower pays this higher cost for the convenience of obtaining a loan quickly without the documentation required from traditional lenders. A hard money loan doesn’t usually take into account the borrower’s income, employment, credit or tax returns. Additionally, hard money lenders can overlook foreclosures, baknruptcy, judgements, bad credit, no credit record, high credit card debt, and unknown sources of down payment. Hard money lenders can take high risk loans, and loan money quickly.
Basics of Hard Money Loans
The basics of hard money require that a borrower’s project make good financial sense, and that the borrower have sufficient collateral to guarantee the loan. The project must also have no title or environmental problems, and must include a sound exit strategy. Hard money loans include loans for non-conventional real estate, land loans, commercial loans, equity loans, start up businesses and residential properties, etc. For any hard money loan, the loan request must include a project description, or executive summary, detailing the above items. The borrower also pays all due diligence costs, closing costs, and for any third party reports required to obtain the hard money loan. Again, you must have equity in the deal to obtain a hard money loan.
Hard Money Loan-To-Value
Hard money loan to value ratios, or LTV ratio, is much lower that traditional loans. Loan to value ratios are usually between 50-60%, but could be more or less depending on the particulars of your hard money loan. Raw land and non-income property carries a lower LTV, and land development loans can have a higher LTV.
Hard Money Interest Rates
Hard money interest rates are always higher than traditional loan rates, ranging from 14-24% or higher, with points. Annual percentage rate, or APR, for hard money loans can be between 19-28%. The interest rates on hard money loans are project dependent. Contact us to discuss the rates and terms available for your project.
Hard Money Terms
The terms for hard money loans can vary from one to five years, again more or less, based on your particular project.
Hard Money Requirements
To figure the requirements for your hard money loan, please fill our our Hard Money Worksheet, and fax it to: 214-824-7179.
Call Today
Texasmortgagecenter.com works with hard money lenders nationwide. Hard money loans are available with no income verification, no credit check and no documention (no doc). Emphasis is not on credit history or ability to make monthly payments. In fact, there are hard money loans with no monthly payments. However, we do not offer any 100% finance programs for hard money loans.
If a hard money loan makes sense for your project, contact us today! If you provide the collateral, we can provide the money.
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