5 Different Types of Hard Money Lenders
Not many understand what hard money loan is; well in simplest terms, it is a specific asset based loan where the borrower gets funding and it’s secured by the value of parcel of real estate. Normally, companies or private investors or individuals are the ones issuing hard money loans. As for the rate of interest however, it is usually higher than traditional lenders.
Majority of the loans are usually used for projects that last for several months to even years. Truth is, it’s almost the same to bridge loan as it carries the same criteria for lending and cost to borrowers. One known difference for bridge loan is the fact that it refers to a commercial property or may be ready for transition and isn’t yet qualified for a traditional financing. Hard money on the other hand is referred to not just asset based loan but potentially, distressed financial situation similar to bankruptcy, arrears on existing mortgage as well as foreclosure on proceedings occurred.
In the next paragraphs, you are going to discover some sources where you can find hard money lenders in case the time comes that you need such loans.
Number 1. Commercial banks – one kind of lender that you may turn into if you need money is commercial banks. There are many lending programs that you can apply for in these banks and say that you have a traditional business setup, then you can apply for hard money loan on these financial institutions to grow your business.
Number 2. Mortgage banks – if you need mortgage loans, then you probably have to pay a visit to a mortgage bank. These hard money lenders are providing money needed to buy a property. If ever that you’ve decided to push through and get money from mortgage bank, make sure to not use this as a long term solution. Oftentimes, the terms are short and you’ll need to come up with balloon payment right at the end of your term.
Number 3. Mortgage brokers – this is another hard money lender that you should not disregard in your list of option. They have wide varieties of lending sources that can be used in getting the best possible deal. With such kind of broker, you can secure money you need in buying a property.
Number 4. Finance companies – as a matter of fact, many finance companies are also offering hard money loans. These finance companies may provide you the cash you need for virtually any project that you need funding for.
Number 5. Online lending companies – checking out for lending companies online is actually one of your easiest options. This makes everything less stressful and more convenient since from the application of the loan to making repayments can be done over the web.