If you own property whether it is single family home, condo, house building or a commercial property, in this economy, chances are you already know about Hard Cash Loan.
Essentially a hard money or a personal money loan is a sub-prime loan. A lender puts more emphasis on the safety rather than your earnings and credit. When you go to a pawn shop to pawn an item, the shop owner does not mind what you do for living, how much you make, and what your credit history is like. He only cares for the value of that time and that too a firesale value.
In a similar fashion, a private lender, looks more at the value of your real property and how much equity you have in it. If the property is worth 1,000,000 bucks and you owe $300,000. You can borrow $200,000 to $300,000 more on it easily. The formula banks use is called loan to worth proportion. Usually it is easy to get a loan up to 60% loan to worth proportion.
Qualifying for this kind of loan is less harsh as compared to a traditional loan especially when it's a non-owner occupied or a commercial property. Debt proportions are liberal and credit report has small consideration. If you had great debt proportions and great credit score why will you be trying for a tough money loan? Therefore if your hard bank is asking you for your credit history, you want to call some other person.
The Pros are it is fast. Mostly it is possible to get funds as fast as 5 working days. Qualifying, as discussed above, is a lot easier. Without hard cash loans lot more people will lose their properties. Hard money or private cash loans meet a vital need in the society. It's a bridge loan and could be a great relief. It is also called a band-aid loan.
The Cons are it is short term. Generally not more than 7 years. Typically it is from one to three years. It is interest only. IR is high, from 10 to 12%. Charges are high. Expect to pay 3 to 6 points.
Not everybody who gets a loan like this has credit or revenue problem. In this economy, more people who are Singapore money lender have good credit and big salary but somehow can't get a bank or a conventioanl loan for one reason or the other. Banks are taking months to close a loan.
Money for funding these loans comes from personal backers; from retirement; hedge funds and Trust Deed Investors.
Essentially a hard money or a personal money loan is a sub-prime loan. A lender puts more emphasis on the safety rather than your earnings and credit. When you go to a pawn shop to pawn an item, the shop owner does not mind what you do for living, how much you make, and what your credit history is like. He only cares for the value of that time and that too a firesale value.
In a similar fashion, a private lender, looks more at the value of your real property and how much equity you have in it. If the property is worth 1,000,000 bucks and you owe $300,000. You can borrow $200,000 to $300,000 more on it easily. The formula banks use is called loan to worth proportion. Usually it is easy to get a loan up to 60% loan to worth proportion.
Qualifying for this kind of loan is less harsh as compared to a traditional loan especially when it's a non-owner occupied or a commercial property. Debt proportions are liberal and credit report has small consideration. If you had great debt proportions and great credit score why will you be trying for a tough money loan? Therefore if your hard bank is asking you for your credit history, you want to call some other person.
The Pros are it is fast. Mostly it is possible to get funds as fast as 5 working days. Qualifying, as discussed above, is a lot easier. Without hard cash loans lot more people will lose their properties. Hard money or private cash loans meet a vital need in the society. It's a bridge loan and could be a great relief. It is also called a band-aid loan.
The Cons are it is short term. Generally not more than 7 years. Typically it is from one to three years. It is interest only. IR is high, from 10 to 12%. Charges are high. Expect to pay 3 to 6 points.
Not everybody who gets a loan like this has credit or revenue problem. In this economy, more people who are Singapore money lender have good credit and big salary but somehow can't get a bank or a conventioanl loan for one reason or the other. Banks are taking months to close a loan.
Money for funding these loans comes from personal backers; from retirement; hedge funds and Trust Deed Investors.
About the Author:
Yanni Raz is a mentor for lots in the Estate Mortgage industry, Yanni Raz is been schooling many homeowners in California about loans and help some also to save their homes through loan in sg
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