Hard Money Loans
Hard Money Loans – the Answer to Your Problems?
In this time of economic downturn, it is hard to be certain if our business is doing just fine to survive or would it face foreclosure or even worse, bankruptcy. While nothing is certain except for the crisis itself, it is getting hard and harder to know where to find help when your business is on the line. If you are one of the many who are facing either a foreclosure or a bankruptcy, it may be excellent for you to consider about taking hard money loans.
A hard money loan has higher risk to its lender, thus they are usually provided by private lenders instead of conventional lenders such as banks. But, a hard money loan can be used by people who are facing financial hardships, because the lending criteria are simpler than a traditional loan. The hard money loans are given based on the value of your real estate property; but your credit history will still be taken into consideration by the lender. A hard money loan interest isn’t based on bank rates, as most conventional loan interest is. Thus it may range slightly higher, from 15% to 25%. These numbers are a small less for the bridge loans, which are similar but rarely used during financial hardships.
One thing to keep in mind about a hard money loan is that it usually used for emergency financial situation, so the interest rate is pretty high. You don’t want to make a hard money loan as a source of long-term financing. In fact, the term of hard money loan is generally small. Rethink about whether you will be able to handle the loan, because the rates may increase to the legal state limits upon default (it can reach up to 25%-29%)
How do you measure hard money loans? A hard money loan have an LTV (Loan-to-Value) about 65%-70% of the value of your real estate property. There were times in the ’80s and ’90s when LTV percentage was higher due to the excessive lender overestimation of property values in those decades. Nowadays, interest rates are raised and LTVs lowered. Hard money lenders today want their lien to be prioritized over all others on a given property, so if the value of the property isn’t enough to cover the existing mortgage, the loan will need to be cross-collateralized with another property (these cases often referred as “blanket mortgages”).
When is the right time to take a hard money loan? Well, the utmost act you have to do first is to review your financial situation thoroughly before you can even choose whether to take hard money loans or not. Try talking to a certified mortgage planner if you are still uncertain about it. In the incorrect time when you still have other alternatives, taking hard money loans can be a burdening yoke for your business and financial wellbeing. But in the right time, a hard money loan may be all you need to save your business and financial situation from foreclosure or bankruptcy.
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Tags: bankruptcy, certified mortgage planner, credit history, emergency financial situation, foreclosure, hard money lenders, Hard Money Loans, LTV, Personal LoansTags: bankruptcy, certified mortgage planner, credit history, emergency financial situation, foreclosure, hard money lenders, Hard Money Loans, LTV
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[...] Random Feed wrote an fascinating post today onHere’s a quick excerptHard Money Loans – the Answer to Your Problems? In this time of economic downturn, it is hard to be certain if our business is doing just fine to survive or would it face foreclosure or even worse, bankruptcy . While nothing is certain except for the crisis itself, it is getting hard and harder to know where to find help when your business is on the line. If you are one of the many who are facing either a foreclosure or a bankruptcy , it may be excellent for you to consider about takin [...]
[...] Random Feed wrote an fascinating post today onHere’s a quick excerptHard Money Loans – the Answer to Your Problems? In this time of economic downturn, it is hard to be certain if our business is doing just fine to survive or would it face foreclosure or even worse, bankruptcy . While nothing is certain except for the crisis itself, it is getting hard and harder to know where to find help when your business is on the line. If you are one of the many who are facing either a foreclosure or a bankruptcy , it may be excellent for you to consider about taki [...]