Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

Advantages of a Hard Money Loan

By Teresajeane Subscribe to RSS | April 19th 2012 | Views:

A hard money loan is a kind of borrowing in which a lender gets loans founded on the rate of a definite parcel of commercial property. This means a loan where the borrower supports the loan demand by choosing on the rate of and equity in the properties, without spending substantial time traditional lenders spend on records and confirmation of lender for the same amount of loan. The most essential problem in case of hard money loan is that this loan includes much higher interest rate than other types of loans.

Key Features of Hard Money Loan

As in traditional loans a borrower spends substantial amount of money and time on confirming borrower's credentials, his income, basis of income, tax record, credit record and so on, in case of hard money loan, borrowers evade the above process as the loan amount in hard money loan is based on the rate of the real properties or collateral anchoring the loan, thus, hard money loan is presented at the smallest amount probable time. Hard money loans are also those loans that require funding rapidly and the lender cannot stay for weeks or months for a traditional lender. Hard Money Loans Key Factors such as fastest processing, not connected with lender’s credit history, income level, source and so on, can be borrowed even in case of legal and operation troubles, terms: flexible loan terms between 6months and 20 years COLLATERAL: Real estate and other fixed or liquid assets and Special Situation Financing Structure offered for all kind of commercial or residential property growth that cannot be funded by the more traditional borrower.

Loan Structure:

A hard money loan is presented when the connected property is presented as collateral and the total of loan is founded on the quick-sale rate of the assets against which the loan is prepared. Usually, most borrowers fund in the 1st-lien place, meaning that in the episode of a default, they are the primary creditor to get payment.

The loan total in case of hard money loan is determined as a percentage of the quick-sale rate of the subjected assets. This percentage is known as the Loan-to-Value or LTV ratio and naturally changes between 60-70% of the rate of the assets. Value, in this case is decided as 'today's purchase price' This the amount that a borrower could sensibly anticipate to understand from the deal of the assets in the occasion that the loan defaults and the assets must be sold in a 1-4 months' instance. Thus rooted in the above, a hard money lender, may arrange a loan such as

68% Hard Money Loan

18% Borrower equity (cash or additional collateralized real estate)

14% Seller carry back loan or other subordinated (mezzanine) loan


It has been seen that hard money loan is perfect for lenders who are not capable to borrow from traditional basis. Such lenders are often bounded by operational and legal matters. In such cases, hard money loan givers resolve the troubles and find the assets appropriate for borrowing from traditional lenders. Though the sort of assets to be regarded as collateral rely on the lender, usually the following earnings producing and non-income producing assets are regarded appropriate for collateral such as condo/co-op conversions, apartments, retail/shopping/strip centers, industrial, office buildings, mixed use properties, hotels/motels, mobile home parks and restaurants and medical. There are some Non-income producing properties such as development, construction, land acquisition, bank workouts, foreclosures and bankruptcies.

LOAN Amount and Interest Rate:

Loan size differs from borrower to borrower but the usual range is £500,000 to £75 million on different types of properties. Repayment period is usually in between 6 months to 20 years. Interest rate is rooted in different features like loan amount, repayment duration, threats involved etc but generally stay in the variety of 10%-13% with a small fees starting at 2%.

Loan Processing:

Processing papers for hard money loan is very simple and fast as compared to documents for other types of loans. You can fill out the online application form from the official website of different borrowers or can contact these borrower’s executives who give quick service on phone.

Teresajeane - About Author:
Also read about Sacramento hard money and Sacramento private money and also units hard money.

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:

Related Finance Articles Subscribe to RSS

Personal finance can be fun - Saving money in this tight economy
Published by Sandra Parker on January 23rd 2012 | Finance
In a tight economy it can become hard for you to save money. But, in actuality if you give importanc...
Buy socks online and save time and money
Published by Maryparker on June 14th 2012 | Finance
Till date have you seen a man without wearing socks? You must have and the sight sure would have bee...
Five efficient ways to save money
Published by Heather Protz on February 28th 2012 | Finance
Efficient ways to save money during times of unexplainable currency drought....
Essentials for Investment decision and money management
Published by Isol on August 13th 2012 | Finance

Investment is a concept involving restoring your money via acquiring of assets, lending fin...
Contact Blake, THE professional and fair debt collection agency designed to take the hassle out of recouping your money!
Published by James Blee on June 16th 2012 | Finance
Leading from the front is Managing Director Howard Blake who understands the importance of successfu...
Tips and Tricks to make money to pay off your holiday debts
Published by Evan Parker on December 17th 2011 | Finance
The best way to deal with holiday debt is paying it off. With the advent of internet earning a bit e...
Loans Guaranteed Acceptance - asset free money without any collateral!
Published by Alice Johnsonn on January 10th 2012 | Finance
Loans Guaranteed Acceptance can be availed easily with the help of internet make a quick application...
It is very hard to tell the worth of financial advice
Published by Ross Sorin on March 13th 2012 | Finance
People even in today’s fast times do not know the important of financial advice. The financial adv...
Tips on how to make money on real estate foreclosures
Published by Shaz Memon on December 26th 2011 | Finance
Making money on real estate foreclosures is indeed a good idea. Get cheaper ones and earn good money...
Principles associated with Investment decision as well as money supervision
Published by Isol on August 13th 2012 | Finance

Investment decision is really a concept of reestablishing the money by using buying associated w...
Top tips for money management and using a credit card
Published by Jesse Wallace on June 6th 2012 | Finance

Learning how to use your credit card effectively could help you balance and manage your debts....
Getting Emergency money
Published by Alma White on March 13th 2012 | Finance
Taking out payday loans should only be done in an absolute emergency after other sources have been e...