Hard Money - Hard Money lending is popularly used by individuals who do not fit within the parameters of the conventional lending industry, or whose needs are highly specialized. Hard Money loans are often referred to as hard equity loans, because unlike a conventional mortgage, which focuses primarily on the credit score and mortgage history of the applicant, a hard money loan is focused primarily on the equity you have in the property.

Most true Hard Money or Hard Equity mortgage products are interest only, meaning that you would not have to pay the principal on the property while you were in the hard money loan.

Hard Money mortgages are short term loans, which are intended to be used from 6 months to 3 years to fulfill a specific purpose.

Hard money loans are usually a bit higher in interest rates, but the good thing is they offer the client more flexibilty when financing or refinancing a home.

Most hard money lenders will lend up to 70% of the value of your property, whether it is for a new construction or to save you from foreclosure, without looking at your credit. The rates which they charge are generally higher than those you would expect if you qualified for a conventional mortgage, and the closing costs are generally higher because of the risks involved in lending to a person or party without qualifying credit.

Hard money or hard equity refinances are very popular amongst borrowers who are facing foreclosure, because they cannot qualify for conventional loan programs once they have become 120 days late on their mortgage.

Many borrowers choose to refinance using a hard money or hard equity loan when their credit scores fall below 500. This is permissible provided that the borrower benefits from the refinance, for example in cases where they face foreclosure or when it is possible to refinance and take cash out to consolidate their credit card debts, thereby potentially improving their credit over time.

Hard Money - Private Money used for loans that do not qualify for traditional loan programs.

Hard Equity loans are a popular options for borrowers who credit scores are below 500.

Hard Money Loans are for people with little or no credit at the time and little or no money. They carry high interest rates and heavy risk. But sometimes you just don't have a choice. It's better to pay those high rates than to lose your property.

A major down side to hard money loans is that they don't report to credit bureaus. Your timely payments won't show up on your credit report, and therefore you won't be building positive credit.

The term "Hard Money Loan" as it is referred to in real estate or lending world is a type of non-bankable loan. Usually this means a loan where the lender can approve the loan request based upon the value of the assets and the equity in the assets, side stepping much of the usual time consuming documentation and verification that a lender might require to lend the same amount of money under "Soft" terms.

All available resources should be considered before entering into a hard money loan. Hard money lenders usually do not have much, if any, leniency towards payment due dates and their terms are usually not very favorable. However, hard money lenders may be the best, or only, option for some situations. They will lend you money when no body else will.

With hard money loans it is typical to pay anywhere from 2-6 points (or 2-6% of the loan amount).

Generally used by real estate investors who are buying properties that they intend to renovation and either resell or rent out, hard money loans are a good option for borrowers with a unusual scenario, i.e. extremely low credit score, only looking to keep the property a short time, need purchase and rehab money in one loan, etc. Hard money loans need to be high risk and therefore high cost loans, with average interest rates in the range of 13% or 14%. Most are short term loans (6 months on average) and are structured so that the borrower is only making interest payments during the course of the loan, with the whole principle amount due at the end of term. Credit Scores as low as 550 (depending on the lender), this can be a good alternative for borrowers who need short term money, but don't fit "cookie cutter" financing. However before entering a Hard Money Loan, the borrower needs to have the entire purchase planned out, including (most importantly) an exit strategy for the loan.

Typically hard money loans are made at 50-70% of a property's value. Since hard money loans are asset based, hard money lenders generally tend to take a conservative approach on the valuation of a property.

Hard Money - A hard money loan is a specific type of financing in which a borrower receives funds based on the value of a specific parcel of commercial real estate. Hard money loans are typically issued at much higher interest rates than conventional commercial or residential property loans and are almost never issued by a commercial bank or other deposit institution.

Hard money loans are usually a last resort and usually not only carry high rates but unfavorable terms also. Make sure you understand the terms of a hard money loan and you have exhausted all other options before entering into a contract for a hard money loan.

Hard money lenders don't report your payments to the credit bureaus. Even if you make all of your payments on time, you will not build positive credit.

Hard Money is usually an asset based loan. Most Hard Money lenders will lend a percentage of the fair market value of a property. The percentage can range from 50% to 70%. These loans are great for real estate investors, borrowers with very poor credit, and for foreclosure bailouts.

Hard Money Loans - Hard money, also known as private money, is a type of loan for people who dont qualify for conventional loans. There is a variety of uses for hard money.

Hard money loans will typically have lower LTV'S and higher interest rates then standard mortgage programs. If you have a large downpayment or lots of equity in your home then this may be your only option if you have very poor credit.

Hard money loans should be very carefully considered before entering into one. These are usually very high risk loans and can have severe consequences if you are late on your monthly mortgage payment. Weigh all options before entering into a contract for a hard money loan and make sure you are completely aware of all guidelines and terms of the loan before signing the closing paperwork.

One slight down side to having a private or hard money loan on your property is this. Since private individuals or entities normally make these loans, they do not report to the major credit bureaus. This means that even though you are making your mortgage payments on time, it does nothing to improve your credit score. Additionally, when you go to refinance out of the private money loan it becomes difficult to establish your mortgage payment history. The new lender will require that the history be documented.

Hard Money

Private Money used for loans that do not qualify for traditional loan programs.

If you are facing foreclosure a private money loan can help you get a fresh start. Pay your private mortgage on time for one year and you will be able to refinance into a much lower rate loan. During this time, it is important to clean up your credit and remove negative items from your report.

A hard money loan is a loan collatoralized on real estate based on the quick-sale value of the property which the loan was drawn on.

Many Hard Money Loans require a BPO in addition to an appraisal.
A BPO is a Broker Price Opinion from a real estate broker to find out what the house can be sold for if in must be sold quickly.
The Hard Money Lender usually has a list of BPO vendors that they will accept.
Contact Marty Searing at 414-303-1215 or msearing@mayfairmortgage.com for more information about Hard Money Loans.

Be very careful when going with a hard money loan because the consequences are can be very rough. An example, such as paying it late once, can possibly forfeit your ownership of that property.

Hard Money for Commercial Property - Hard money for commercial property is very much like hard money for residential in most instances. It is typically up to 70% LTV and it is obtained to buy property that is under contract for less than its appriased value due to numerous reasons such as someone is retiring and wants out, someone needs to move and is no longer able to run the business or it is part of an estate. It can also be used to refinance for further construction or improvements of a current owner but who is not able to obtain conventional lending.

The difference is although hard money for commercial is easier to qualify for than conventional means, it is still based on more than just equity. For example it is important that the borrower has experience in the indusrty they are buying the business for, such as a purchaser of a hotel should at least have hopsitality experience. That si just one of the differences.