Los Angeles Hard Money Lender

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Los Angeles Hard Money Lender
Hard money lenders are typically private
individuals or small groups that lend money based
on the property you are buying, and not on your
credit score. Usually these loans cost much more
then an average mortgage, often times up to twice
what a regular mortgage does, plus high
origination fees.
Hard money is a way to borrow without using
traditional mortgage lenders. Loans come from
individuals or investors who lend money based
(for the most part) on the property youre using
as collateral. When loans need to happen
quickly, or when traditional lenders will not
approve a loan, hard money may be the only
option. Let's review how these loans work.
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What Is Hard Money?
Most loans require proof that you can repay them.
Usually, lenders are interested in your credit
scores and your income available to repay a loan.
If you have a solid history of borrowing
responsibly and the ability to repay loans,
you'll get approved for a loan. Getting approved
with a traditional lender is a painfully slow
process even with great credit scores and
plenty of income. If you have negative items in
your credit reports, the process takes even
longer and you might not ever get approved.
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Why Use Hard Money?
If hard money is expensive, why would you use it?
Hard money has its place for certain borrowers
who cannot get traditional funding when they need
it. Speed Because the lender is mostly focused
on collateral (and less concerned with your
financial position), hard money loans can be
closed more quickly than traditional loans.
Lenders would rather not take possession of your
property, but they don't need to spend as much
time going through a loan application with a fine
toothed comb verifying your income, reviewing
bank statements, and so on. Once you have a
relationship with a lender, the process can move
quickly, giving you the ability to close deals
that others cant close (thats especially
important in hot markets with multiple
offers). Flexibility Hard money agreements can
also be more flexible than traditional loan
agreements. Lenders don't use a standardized
underwriting process. Instead, they evaluate each
deal individually. Depending on your situation,
you may be able to tweak things like the
repayment schedules. You might be borrowing from
an individual whos willing to talk not a large
corporation with strict policies.
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Why Use Hard Money?
Approval The most important factor for hard
money lenders is collateral. If youre buying an
investment property, the lender will lend as much
as the property is worth. If you need to borrow
against a different property you own, that
propertys value is what the lender cares about.
If youve got a foreclosure or other negative
items in your credit report, its much less
important some lenders might not even look at
your credit. Collateral With a hard money loan,
the property itself usually serves as collateral
for the loan. But again, lenders may allow
investors a bit of leeway here. Some lenders, for
instance, may allow you to secure the loan using
personal assets, such as a retirement account or
a residential property you own.
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The Bottom Line
The Bottom Line Hard money loans are a good fit
for wealthy investors who need to get funding for
an investment property quickly, without any of
the red tape that goes along with bank financing.
When evaluating hard money lenders, pay close
attention to the fees, interest rates and loan
terms. If you end up paying too much for a hard
money loan or cut the repayment period too short,
that can influence how profitable your real
estate venture is in the long run.
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Thank You