Hard Money Loans & Lenders

Hard Money Loans & Lenders | Charm City Realty Group

WHAT IS A HARD MONEY LOAN?

A hard money loan is typically an asset based, short term loan secured by a property to a real estate investor or developer. They are financed by private speculators instead of conventional lending terms such as banks. The terms are generally around 6 months and can go up to 24 months depending on the terms of the loan and the lender. Some lenders can even be stretched out to longer terms of 3-5 years. The loan typically requires regularly scheduled “interest-only” installments and the interest rates can range from 12-18% depending on the lender’s comfort level.

The financed sum that the hard money lenders give essentially depends on the estimation of the subject property. The property might be one the borrower owns and wishes to use as security or it might be the property the borrower is buying.

TYPES OF PROPERTY FOR HARD MONEY LOANS

A borrower can get a hard money or short term loan on a property – including business property, single-family homes, multi-family homes, and land.

Some hard money lenders may have some expertise in one particular property type, for example, residential home and not have the capacity to give financing for other types of property, just on the grounds that they have no experience on such property. Most hard money lenders have a particular specialty of financing that they are mostly OK with. Ask questions before you apply for a loan from a hard money lender to inquire about their specialty or criteria.

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WHO SHOULD USE HARD MONEY LOAN

Builders, developers and rehabbers use hard money financing for some unique reasons. The principal reason is the capacity of the hard money lenders to support the financing quickly without the “red tape” that the banks will use. Hard money financing can be provided within seven days or sooner depending on the lender. Contrast that with the 30 – 45 days it takes to get bank financing funded. The application procedure for a hard money financing can take 1-2 hours and can be affirmed that day.

The capacity to acquire financing at a substantially speedier rate than a bank credit is a noteworthy preferred standpoint for builders, developers and rehabbers. Particularly when the borrower is attempting to gain a property with many contending offers, a snappy loan from hard money lenders will help hasten their bid from other bidders.

THE NATURE OF HARD MONEY LOAN INTERESTS

The interests and charges by hard money loans will differ from one lender to the other and will likewise differ from place to place. For instance, hard money loans in California, for the most part, have brought down the rates more than different parts of the nation as California has numerous hard money lending firms. Expanded rivalry prompts a decline in interest.

Hard money lenders go out on a limb with their financing contrasted with traditional lending methods. Because of this higher risks required for a hard money financing, the interest rate for a hard money loan will be higher than standard mortgages.

HOW TO FIND HARD MONEY LENDERS

Looking to find a hard money lender? Contact Us for a list of lenders in the Maryland area and beyond.

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