A hard money loan is a specific type of asset-based loan financing through which a borrower is reviewed based upon a secured real property. Hard money loans are typically issued by private investors or companies. Interest rates are typically higher than conventional commercial or residential property loans because of the higher risk and shorter duration of the loan. Most hard money loans are used for projects lasting from a few months to a few years. Hard money is similar to a bridge loan, which usually has similar criteria for lending as well as the cost to the borrowers. The primary difference is that a bridge loan often refers to a commercial property or investment property that may be in transition and does not yet qualify for traditional financing, whereas hard money often refers to not only an asset-based loan with a high-interest rate, but possibly a distressed financial situation, such as arrears on the existing mortgage, or where bankruptcy and foreclosure proceedings are occurring.
The qualifying criteria for a hard money loan varies widely by lender and loan purpose. Credit scores, income, and other conventional lending criteria may be analyzed. However, most hard money lenders primarily qualify a loan amount based on the value of the real estate being collateralized. Typically, the biggest loan one can expect would be between 65% and 75% of the property value. That is, if the property is worth $100,000, the lender would advance $65,000 - $70,000 against it. This low LTV (loan to value) provides added security for the lender, in case the borrower does not pay and they have to foreclose on the property.*
Private equity loans or mortgage programs for bad credit borrowers feature higher rates but also eliminates hassles and headaches of financing through traditional banks.
Florida Private Equity Loans can be used for:
There are many advantages for investors to choose blanket loans in Florida. Blanket loans are secured by one or more parcel of properties. You only have one payment and save yourself thousands in separate interest payments, and thousands in escrow costs. Hard money programs allow you to use multiple properties to obtain larger loans.
Blanket loans are attractive to hard money lenders in Tampa, Florida because there are multiple properties secured. This provides our partners with peace of mind, knowing the investor is more inclined to make payments and has more protection against default. In return, investors have the ability to save more money on interest and escrow as well as a bigger cash out.
Hard and private money investors have helped thousands of borrowers in Bradenton and Ocala, Florida with equity in paid-off or mortgage-free single family homes, condos, manufactured homes, townhouses, investment properties, and commercial properties. They provide a strong financial exit strategy and financial plan to consolidate your debt. Slash those credit companies! Save money and invest it to get a better return.
Hard Money Network is provided by investors who offer equity loans for free and clear properties in Florida. We at AHL Hard Money Network are a lead and marketing company that connects borrowers with hard and private money investors and we provide educational resources on hard money for potential borrowers.