Q&A

  Questions and Answers:

1. What is ‘Hard Money Loan’

•  A short-term bridge loan. The loans are determined by the value of the property. Since the property itself is used as the only protection against default by the borrower, hard money loans have lower LTV ratios against ARV. 
• Hard money loans interest rates are higher than subprime loans. Since traditional lenders, such as banks, do not make hard money loans, hard loan lenders are sometimes private individuals that see value in this type of potentially risky venture. Hard money loans are used in turnaround situations, short-term financing, and by borrowers with substantial equity in their property. 

2. Are Hard Money Loans a Good Idea?

• Hard money loans are good for investors who need to get a quick funding for an investment property, without any of the red tape that goes along with bank financing. 

3. How much do you have to put down on a hard money loan?

• Pprefer you to put down 10% to 20% percent of the purchase price, which mostly gives you better terms on the loan.  100% for VERY experience investors, 2-4 properties per year. ** GAP FUNDING IS AN OPTION UP TO $10,000.00 Call for more details.

4. Why is it called hard money lending?

• It’s called a “hard money” loan because the property evaluation is looked at HARD, everything is based on the property for which the funds will be used instead of looking at your full documentations. 

5. What are hard money loans rates and terms?

• Interest rates range from 9% – 12% depending on the property and the perceived risk of the loan. Points can range anywhere from 2 – 4% of the total amount of the loan. The interest rates and points may vary greatly depending on the loan to value ratio.