Do you really think private hard money loans are feasible option?
If you have average credit score or suppose bad credit score then consider opting for hard money loans.
Hard money lenders in market today are popularly known for meeting emergency financial needs, especially when it comes to real estate investment.
Such lenders lend money on the basis of equity of property and not as per your credit score. On the other hand they charge high interest rate and such loans are generally issue for short time span.
These are short term loans which you can avail by finding reputed private money lender in market.
The qualifying criteria for a hard money loan varies widely by lender and loan purpose. Credit scores, income and other conventional lending criteria may be analyzed.
However, most hard money lenders primarily qualify a loan amount based on the value of the real estate being collateralized.
Typically, the biggest loan one can expect would be between 65% and 75% of the property value. That is, if the property is worth $100,000, the lender would advance $65,000 - $70,000 against it.
This low LTV (loan to value) provides added security for the lender, in case the borrower does not pay and they have to foreclose on the property.
As a real estate investor there may come a time that it is to your advantage to get a Hard Money Loan (HML, bridge loan, private financing or equity based loan) for a transaction that you cannot get financing from a conventional lending.
As a matter of fact even if the rate and fees may be higher on an HML it may be better for you even if you qualify for conventional financing.
These short term bridge loans can help you close a "HOT" real estate investment deal and utilize creative financing that you may not have been able to employ using conventional financing.
Ultimately the goal is to make money. Private money programs are designed to do just that.
They help the borrower make money as well as the lender, with as little red tape as possible.
If you have average credit score or suppose bad credit score then consider opting for hard money loans.
Hard money lenders in market today are popularly known for meeting emergency financial needs, especially when it comes to real estate investment.
Such lenders lend money on the basis of equity of property and not as per your credit score. On the other hand they charge high interest rate and such loans are generally issue for short time span.
These are short term loans which you can avail by finding reputed private money lender in market.
The qualifying criteria for a hard money loan varies widely by lender and loan purpose. Credit scores, income and other conventional lending criteria may be analyzed.
However, most hard money lenders primarily qualify a loan amount based on the value of the real estate being collateralized.
Typically, the biggest loan one can expect would be between 65% and 75% of the property value. That is, if the property is worth $100,000, the lender would advance $65,000 - $70,000 against it.
This low LTV (loan to value) provides added security for the lender, in case the borrower does not pay and they have to foreclose on the property.
As a real estate investor there may come a time that it is to your advantage to get a Hard Money Loan (HML, bridge loan, private financing or equity based loan) for a transaction that you cannot get financing from a conventional lending.
As a matter of fact even if the rate and fees may be higher on an HML it may be better for you even if you qualify for conventional financing.
These short term bridge loans can help you close a "HOT" real estate investment deal and utilize creative financing that you may not have been able to employ using conventional financing.
Ultimately the goal is to make money. Private money programs are designed to do just that.
They help the borrower make money as well as the lender, with as little red tape as possible.
from Real Estate Investing Tips - LM2 Investment Group - Blog http://ift.tt/1fywayX
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