Looking to Invest in 2021? What Hard Money Bankers Wants You To Know About Hard Money Loans

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Hard money loans have an awful history. They signified risky loans that greedy lenders would give out to unsuspecting borrowers who used real estate as their loan collateral. Later on, these lenders would foreclose the real property after borrowers fail to pay back.

Does that sound scary enough? Well, you’ve got nothing to fear anymore. Hard money loans don’t work that way today.

Today, a hard money loan is a short-term loan you get from private investors and secure with real estate property. Unlike what existed decades ago, hard money loans are typically 12 months long.

But borrowers can extend to loan term to as much as 3-5 years. These loans require borrowers to pay only interests monthly. Or, in some other agreement, both parties could agree that the borrower pays some principal, interest, and a balloon payment when the loan term ends.

Hard money loans are the specialty of investors like Hard Money Bankers. While the loan type looks so straightforward, many precautions would help you have your ducks in a row before getting a hard money loan.

Here are some tips about hard money loans that Hard Money Lenders believe will come in handy.

Interest Rates for Hard Money Loans

The interest rates lenders charge for hard money loans vary across lenders and locations. Hard money lenders do not have fixed rates like banks and other conventional lenders.

That’s because hard money lenders generally assume bigger risks on hard money loans. So, if you’re taking a hard money loan, you may want to brace up for a 10-15% interest rate, depending on the loan’s risk, region, and the lender.

Equity over credit Rating

Hard money lenders place more value on the equity in the property than on the borrower’s credit history. For hard money lenders, they simply want the loan to be repaid.

And if you can prove that you have the capital to pay the loan’s interest, you’ll get a loan. Lenders in these post-pandemic times are on the look out for opportunities.

So, all they want to know is if the borrower has invested much equity in the property used as collateral.

Types of Properties for Hard Money Loans

Hard Money loans are fitting for different property types. You can get a hard money loan for commercial, residential, and industrial properties.

In some cases, lenders also give loans on land and tend to specialize in one property type.

Ideal Usage for Hard Money Loans

The trend in real estate has shown a surge despite the pandemic. If you’re looking to get a hard money loan, you can use it for various purposes. It is not true that hard money loans are not the best for all types of real estate investment.

Contrary to popular belief that when it comes to a primary residential property, conventional bank is the way to go. Hard money loans is also perfect for residential just like it is ideal for constructions, fix and flips, and lands.

In case you find yourself in need of a hard money loan, Hard Money Bankers offer one of the country’s best financing options.

They are a leading private investor and hard money lender for real estate investment. Their services cut across Pennsylvania, Northern Virginia, Maryland, Virginia & Washington DC.

 

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