Hard Money Lenders
Hard money lenders specialize in providing a specific type of loan to borrowers interested in real estate acquisition and investment. Hard money loans are asset based loans with interest rates that are typically higher than traditional mortgage loans, but also offer an easier application process and a faster turn around time, perfect for real estate investors. Hard money lenders typically offer short-term lending periods and more specialized qualifying criteria. Hard money lenders work with both real estate investors who are interested in purchasing and renovating properties and then selling them for a profit or Investors who intend to rehab and then rent roll up and secure conventional financing once the repairs and rent roll has been stabilized.
Structure Of Hard Money Loans
Hard money lenders base their loan amounts on what is known as a loan to value ratio or LTV of the subject property, which usually represents 60-70% of the total value of the property, which is defined as the amount that the lender could reasonably be expected to receive from the sale of the property on a quick sale basis. This means that your loan amount will vary based on: the purchase price of the property, the estimated cost of repairs, and the estimated value of the property once the repairs have been made.
Criteria For Hard Money Lenders
Hard money lenders are required to follow the same licensing requirements and usury laws that banks and traditional lending institutions adhere to. However, Hard money lenders get their money from private individuals and therefore are not subject to the strict underwriting requirements that banks, credit unions and other conventional lenders are subject to. Specific criteria for hard money lending varies by state, and there may be individual loan limits imposed by certain states that may affect how many rehab loans you can qualify for from the same lender. For this reason, it is important to find out whether the lender you choose is legally able to operate in your state. At ZINC Financial, for example, we specialize in private hard money lending in California and Arizona.
Hard money loans have helped many real estate investors realize their investment and acquisition goals, and at ZINC, our qualified financial experts are standing by, ready to help you achieve yours.
Visit www.zincfinancial.net for loan programs and investor requirements.
© 2016 ZINC Financial, Inc.Loans made or arranged pursuant to a California Lender's License