If you're the owner of real estate if it is single family home, condo, house building or a commercial property, in this economy, likelihood is you already know about Hard Cash Loan.
Essentially a tough money or a private money loan is a sub-prime loan. A lender puts more focus on the safety instead of your earnings and credit. When you go to a pawn shop to pawn an item, the store owner does not care what you do for living, how much you make, and what your credit score is like. He only cares for the value of that time and that too a firesale worth.
In a similar fashion, a private bank, looks more at the value of your real property and how much equity you have in it. If the property is worth a million dollars and you owe $300,000. You can borrow $200,000 to $300,000 more on it easily. The formula banks use is named loan to value ratio. Usually you can get a loan up to 60% loan to worth ratio.
Qualifying for this sort of loan is less draconian as compared to a typical loan especially when it is a non-owner occupied or a commercial property. Debt ratios are liberal and credit history has tiny consideration. If you had great debt proportions and good credit score why will you be trying for a hard money loan? Hence if your hard money lender is asking you for your credit score, you want to call some other person.
The Pros are it is fast. In most cases it is easy to get funds as fast as 5 working days. Qualifying, as mentioned above, is far simpler. Without hard cash loans lot more folk will lose their properties. Hard cash or private money loans fulfill a crucial need in the society. It's a bridge loan and could be a great relief. It's also called a band-aid loan.
The Cons are it is short term. Often not more than seven years. Mostly it is from 1 to 3 years. It is interest only. IR is high, from 10 to 12%. Fees are high. Expect to pay three to 6 points.
Not everybody who gets a loan like this has credit or income problem. In this economy, more and more individuals who are singapore money lending have sound credit and big salary but somehow cannot get a bank or a conventioanl loan for one reason or the other. Banks are taking months to close a loan.
Money for funding these loans comes from non-public financiers; from retirement; hedge funds and Trust Deed Backers.
Essentially a tough money or a private money loan is a sub-prime loan. A lender puts more focus on the safety instead of your earnings and credit. When you go to a pawn shop to pawn an item, the store owner does not care what you do for living, how much you make, and what your credit score is like. He only cares for the value of that time and that too a firesale worth.
In a similar fashion, a private bank, looks more at the value of your real property and how much equity you have in it. If the property is worth a million dollars and you owe $300,000. You can borrow $200,000 to $300,000 more on it easily. The formula banks use is named loan to value ratio. Usually you can get a loan up to 60% loan to worth ratio.
Qualifying for this sort of loan is less draconian as compared to a typical loan especially when it is a non-owner occupied or a commercial property. Debt ratios are liberal and credit history has tiny consideration. If you had great debt proportions and good credit score why will you be trying for a hard money loan? Hence if your hard money lender is asking you for your credit score, you want to call some other person.
The Pros are it is fast. In most cases it is easy to get funds as fast as 5 working days. Qualifying, as mentioned above, is far simpler. Without hard cash loans lot more folk will lose their properties. Hard cash or private money loans fulfill a crucial need in the society. It's a bridge loan and could be a great relief. It's also called a band-aid loan.
The Cons are it is short term. Often not more than seven years. Mostly it is from 1 to 3 years. It is interest only. IR is high, from 10 to 12%. Fees are high. Expect to pay three to 6 points.
Not everybody who gets a loan like this has credit or income problem. In this economy, more and more individuals who are singapore money lending have sound credit and big salary but somehow cannot get a bank or a conventioanl loan for one reason or the other. Banks are taking months to close a loan.
Money for funding these loans comes from non-public financiers; from retirement; hedge funds and Trust Deed Backers.
About the Author:
Yanni Raz is an instructor for plenty in the Property Mortgage industry, Yanni Raz is been teaching many house owners in California about personalloan and help some also to save their homes through money lender singapore
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