Facts on Hard Money Loans and Bad Credit
-
Upload
william-horton -
Category
Documents
-
view
212 -
download
0
description
Transcript of Facts on Hard Money Loans and Bad Credit
![Page 1: Facts on Hard Money Loans and Bad Credit](https://reader031.fdocuments.us/reader031/viewer/2022020422/568c0db51a28ab955a8dc4dd/html5/thumbnails/1.jpg)
Facts on Hard Money Loans and Bad Credit
The unfortunate thing about most financial institutions is that they punish you for a bad credit history
even when the situation was out of your control. Most base your loan repayment power on your credit
history. The lender’s interest may not be on the capability of the borrower to pay back the loan
efficiently. However, do not lose hope because there are still other option, you may still be qualified for
a hard money loan.
Hard Money Loan is a kind of financing supported by a property. This suggests that any commercial,
residential or multi-family land property can be collateral for the loan. The loan amount is usually a bit
lower than the actual value of the real estate. It has two reasons. To begin with, the lender wants there
to be sufficient equity for you to make a profit when you resell the property, secondly they want the
equity there in the event they have to take the property back. Generally, the promissory note permit the
lender to take all the income from the sale, so credit is not a big issue when deciding whether to loan
you money
This is a simple means for real estate investors with a bad credit history to access financial help when
they need it. The loan amount is not based on your credit history but on the value of the real estate.
Hard money lending is only based on your existing financial condition and how solid you’re collateral.
Some lenders may want to know whether you are employed, but mostly, the end decision is in
accordance with the property’s value.
The procedure is simple. The best thing to do is prove the property’s value and that you are capable of
repositioning it and making a profit. The lender may have to document this entire prior to making their
decision but will not take that too long. Further, various hard money lenders have their own stipulations
or requirements. Others focus on commercial properties while others may only deal with residential
properties. The lender will tell you the area he specializes in before you do any business with him. Most
hard money lenders are not accredited mortgage brokers, these loans are business loans that exist to be
secured by real estate.
Hard money loans are short-range loans. Usually they are required to be settled back in six months
although it is possible for the lender to give you a longer period to pay up the money. Prior applying for
a loan, make a plan on how you will pay back the money and the duration you need to do this. The good
thing is this type of lending is that even those with dinged credit make use of real estate transactions
when they find them. Many real estate wholesalers are passing deals along because they believe they
cannot obtain the financing