Hard Money Loans & Why You Should Work with a Hard Money Lender
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By Michael Mikhail, CEO & Founder, Stratton Equities
Are you looking to finance a real estate investment but cannot get conventional financing due to a recent foreclosure or short sale? A Hard Money Loan might be the right option for you. Working with a Hard Money Lender will allow you to have your loan approved in half the time a traditional bank loan takes, giving you the opportunity to quickly purchase high in demand properties.
What is a Hard Money Loan?
A Hard Money Loan is ideal for the real estate investor who might have issues obtaining a traditional bank loan or a loan with full underwriting, such as a Fix and Flip Loan.
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A Hard Money Loan is an asset-based loan: the financing is based on the Loan to Value (LTV) of the Asset. There are less restrictions than for other types of loans, so full underwriting and no minimum FICO score are required for the borrower, meaning you don’t have to worry about bankruptcies, foreclosures, collections, etc. They are usually capped at 65% LTV or less. Because of high cost regulations and predatory lending, Hard Money Loans are for investment properties only – so if you’re looking for an owner-occupied property, this is not the loan for you. Some states have non-judicial foreclosure laws, which protect lenders and make them more comfortable doing these high-risk loans, as the money is not sold on the secondary market and the lender holds the note.How can I acquire a Hard Money Loan?
Applying for a Hard Money Loan is a fast and easy process. First, find an investment property and reach out to a direct private money lender to assess your loan scenario. Direct private money lenders, such as the Nationwide Lender Stratton Equities, can provide a Hard Money Loan for the following property types:- Single-Family
- Mixed-Use
- Multi-Family
- Commercial
Why should I work with a Hard Money Lender?
Working with a Hard Money Lender gives you the security needed to take on a high-risk loan. With companies like, Stratton Equities, they have years of experience in working with real estate investors to achieve their goals. Direct Private Money Lenders provide loan programs with less underwriting and less guidelines that close within 14 – 25 days.
