• Exactly what is a Hard Money Loan?


    Up to 90% LTV on Purchase for Individuals, S or C Corporation, or LLC.
    Private loan cash is most often referred to as hard money, in most cases the borrowed funds develops from a source that specializes in structuring such loans. Generally a hard money loan will contain an initial mortgage on the residence thus creating hard money residential loans. There are a variety of identifying factors involved in private loan money that'll be known as hard money loan.

    No Income Verification
    For example, as stated it is usually an initial mortgage. Because the borrower's credit does not matter around the amount of equity within the property, an initial will in effect prevent a possible loss of the entire property if, for example, another loan is "ahead" of the hard money loan. The reason why the borrower's credit is not important much for private loan cash is the lender looks to the property because of its security, and also the lender is also being paid dearly for the chance the lender is taking by basing the money on the property value alone.

    You see, another part of a hard moneylender is always that they often charge very high interest rates in addition to high points. Sometimes, when the rentals are secure enough, those high points is going to be rolled in to the actual loan. Often the loan isn't paid within the typical Principle + Interest (PI) but more than likely is interest only with a balloon after the stated loan period. In this way, essentially, the borrower is paying interest on interest, since points are interest, because the mortgage may have been calculated such as the points, then every payment you makes, paying interest only, is really interest on interest.


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