A hard money loan is a type of mortgage loan used to buy real estate properties. It is usually offered by private money lenders, individuals, and companies like californiahardmoneydirect.net.
The following section provides you a brief overview of hard money loans work. It describes its structure, interest rates, key aspects, and down payment.
1. Structure of hard money loan.
Lenders of hard money not regulated by federal reserve any other loan creditors. The rate of interest, loan terms, fees procedure vary from lender to lender. You need to research these aspects, applicable rules and regulations before you choose a lender for a hard money loan.
2. Loan terms.
Usually, hard money loans hard short term loans the payback period of 6 months. This gives the investor enough time to renovate and sell the property for a profit.
The terms of hard money loans can range from few months to few years. These loans are most beneficial to investors when used for a short term. Investors need to repay the loan in full at the end of the term. A lender can take over the property if the investors fail to repay the loan or defaults the payment.
3. Loan interest rates.
Most of the hard money loans have high-interest rates around 7 to 15%. This is almost double triple than the conventional mortgage in a bank. Since a real estate investment has high risks for lenders. Interest rates are usually high.
4. Fees for the loan.
Hard money lenders charge an origination fee to cover costs. It includes costs for loan initiation, administrative cost, charges, and other expenses to process the loan. These charges are paid by the borrower when the loan is initiated.
5. Down payments.
Lenders of hard money loans require borrowers to pay some money as a down payment. These down payments can vary among different lenders. It is usually 10% of the property value.
6. When to a hard money loan.
Hard money loans are a great opportunity for first-time flippers. They are also suitable for investors with bad credit or no income proof to submit.
These loans are availed by investors who need to raise quick money or when their money is tied up elsewhere. They also help investors who have been denied any loans by a bank.
The California Hard Money Direct provides fast and reliable hard money loans. We have a simple and quick loan process for hard loans. We have served many investors in the past with our easy to access hard money loans. You can reach us with a single phone call at 310-736-1576 or fill out an online request form at our official website, californiahardmoneydirect.net.