Hard loan money residential
Residential hard money loans are those loans in which funds are provided on the basis of specific value of residential real estates. Residential hard money loans are taken by those people that are unable to get loan from traditional lenders like banks and credit unions. There is no government institution backing these loans and this is the reason why interest rates attached with residential hard money loans are very high.
Apart from high interest rates, loan to value ratio is also lower as compared to traditional mortgage loans. Residential hard money loans are provided against the security of residential real estate. It is important to understand here that in case of traditional mortgage lenders, credit scores, income statements, tax returns etc are used for determining the eligibility, loan amount, interest rates and other terms and conditions. However, in case of residential hard money loans that are provided by private lenders, loan amount and other terms and conditions are based upon the residential real estate value.
These loans are also termed as temporary bridge loans that are mostly offered for refinancing, acquisitions etc and to those people who have filed for bankruptcy. Though interest rates are higher, residential hard money loans are still better than adding a financial partner or filing bankruptcy. Interest rates attached with these loans can be 0.5-1% higher than traditional mortgage loans and differ from one lender to another. Residential hard money loans have also proved very useful in renovating residential real estate before renting or selling. In most of cases, these loans are provided for income producing properties. Properties against which these loans are secured have 30-50% equity.
If it is said that residential hard money loan is asset based loan, it would not be incorrect. These loans are generally made by lenders in local areas. LTV varies from 65-70%. Funds are provided against first lien position in almost all the cases. With decline in stated income loans in United States, getting residential hard money loans has become easy. Even if the lender asks for tax returns, it is just for ensuring that borrower is employed and there are no intentions of verifying the income etc. Thus, people who have been denied stated income loans turn up for residential real estate loans. There is one more benefit attached with above loans. Loan amount is generally arrived at on basis of after repair value, whereas in case of conventional mortgage loans, it is not so. However, there are some lenders that do not consider after repair value.
Some lenders of residential hard money loans
Let us discuss some lenders of residential hard money loans for understanding more. LV Hard Money.Com LLC is one source offering above loans in United States. It is located at 101 Convention Center Drive, 10th Floor, Suite 1004, Las Vegas NV. This center offers residential hard money loans against the quick sale value of the property that has been purchased out of finance. In most of cases, lien is made in first position and thus, it remains only mortgage holder in the property. In some deserving cases, it subordinates to another first lien mortgage. Loan to value attached with above loans vary from 60-75%. LTV is arrived at by considering the current purchase value. It is important to note here that current purchase price is the amount that a lender can expect from the sale of property if borrower is not able to make payments. It is also expected that property would be sold in 1-3 months time frame for calculating the above value.
Ehardmoney.com is one online source that helps a person in getting residential hard money loans in United States. It is managed by HardMoneyLeads.com Inc that is located at 1719 Silver Wood Dr, Martinez CA. Contact number of this source is 800-606-3105. It helps a person in getting best rate residential hard money loans. For getting quotes, a person is required to fill the online application. Services are provided free of cost and quotes are offered on no-obligation basis. Online application is easy and secured. All lenders associated with ehardmoney.com are qualified professionals and meet all the industry standards for making loans. Services are offered across United States. It is tried to offer the loan amount in fastest possible manner and at best possible interest rates. Entire loan process is stress free. Information from applicants is accessed by the lenders as well as brokers through free accounts. Ehardmoney.com has been originating loans for past many years. Key factors for the success of this source have been upgraded technology, customer satisfactions, applicability and usability of loan.
Avatar Financing Group LLC is another source offering residential hard money loans in United States. It is located at 100 Wall Street, Seattle WA. Contact number if this lender is 206-728-5900 and toll free number is 1-888-886-0097. Avatar Financing is a direct lender. Though it is a commercial lending institution, it offers residential hard money loans throughout United States. However, there are certain requirements that must be fulfilled. Maximum loan to value provided varies from 65-70% of the fair market value of real estates. Thus, if loan is required for purchasing real estate, borrower is required to provide 20% cash equity. If the loan is required for refinance, fair market value is determined on basis of as is'.
So, loan amount is not based upon ARV or after repair value. Minimum loan offered is $1 million. Thus, fair market value of the property must be $1500000 for qualifying. This is the reason why huge luxury homes and other residential real estate are financed by this lender. FICO scores are not taken into consideration for offering the loan amount. Borrower is also required to pay cost of due diligence in advance. It includes consulting fee of appraiser, attorney fee etc. Overall fee charged is around $5000. While applying for loan, borrower must state the location and type of property, estimated current market value and the reason for seeking residential hard money loan rather than conventional mortgage loan.
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