I often get asked, “When would anyone choose Hard Money?” Well after originating hundreds of Hard Money Loans, we can say “for many reasons”. While Hard Money rates are certainly higher than conventional loan terms, in many instances the money is less expensive compared to other financing alternatives or the potential loss of potential revenue on a business transaction. Additionally, Hard Money eligibility requirements are less stringent compared to the full documentation and income requirements of today’s conventional loans. The Table below represents just a few scenarios where buyers, sellers, investors and business owners have chosen Hard Money:
When to Choose Hard Money?
- A buyer has a time sensitive purchase and a fast closing is required
- A buyer lacks verifiable income to qualify for an institutional loan.
- A buyer needs a cash-out refinance on one property that has substantial equity to get their down payment for another property purchase
- A buyer needs money to cure a Foreclosure and provide time to sell the property
- An owner of a free and clear property needs cash-out funds for a business or investment purpose
- A buyer has a guarantor or co-signer to help them qualify
- The seller has agreed to carry financing but the buyer needs extra cash for the purchase
- A principal in a Real Estate Investment company needs fast, easy financing until the property can be repaired and sold
- A Borrower’s FICO is damaged and does not qualify for Fannie Mae, Freddie Mac, FHA or VA
- A conventional loan is denied due to income, credit or down payment seasoning of funds issues
- The property is not suitable for a conventional loan, i.e. under construction, roof repair required
- An Heir needs money to buy out the siblings in an inherited property
- A buyer only needs the money for a short period of time
- A buyer does not want the documentation hassle of a conventional loan
- Bridge Loan of < 1 year to complete construction of or purchase a Principal Residence
- Seller Carry Back Note is offered at a discount to buyer/occupant
- A property owner needs money quickly to pay off an existing maturing bank or private note
Hard Money is sometimes the best financing alternative. Mortgage Vintage, Inc. provides loan programs to solve the scenarios listed above and creates the highest quality California Trust Deeds in the marketplace. We efficiently connect current income seeking investors with qualified borrowers who want a fast and professional business purpose hard money loan. When have you chosen, needed or experienced a successful Hard Money Loan? We would like to know. Please submit a post on our Mortgage Vintage, Inc. Facebook Page or our LinkedIn Company page. If you enjoy discussions like this, please sign up for our Linked in Group called Southern California Trust Deed Investment Group.
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