What is hard money lending

"Hard money" as commonly used, are loans by private lenders, often at high interest rates and short terms. Contact me, Dave Metsker, at 855-620-2239, to discuss other options.

The benefits of hard money lending are typically: 1. Easier to acquire the loan (i.e. less hurdles to jump through and can typically close very fast) 2. Credit score is not a factor 3. Debt to income ratio can be higher and still close 4. Time frame from bankruptcy and or foreclosure is typically not an issue (which is why hard money loans are the only choice until a bankruptcy or foreclosure is more seasoned)Cons: 1. Interest rates are much much higher 2. Terms of repayment are very well enforced (the consequences of a missed payment are much more onerous) 3. Loan term is typically shorter (30 year terms are not typically available) 4. Due to reason 1 and 3, the payment is typically much higher per monthSummary: If you factor in the differential between a good credit standard loan and a hard money loan and you determine the increased cost is outweighed by the capability to acquire the asset sooner, rather than waiting for your credit to improve/job to improve/bankruptcy to become older/foreclosure to become older--then it makes sense to do the hard money loan. In almost all cases, an individual would be better off improving their financial situation first, rather than putting themselves behind another proverbial eight ball.

Let's discuss your loan scenario in more detail. We offer hard money and private money, in addition to traditional financing. Contact me at 800 315 8803. My name is Jamie and I have been in the mortgage business since 1989. I am happy to answer your mortgage questions, 7 days a week and review your loan scenario.

Hard money and private money - typically refer to non bank, non traditional lenders who are willing to lend more along the lines of "it makes sense", than following more common Fannie Mae, Freddie Mac type guidelines - guidelines that your situation would commonly be denied. Big down payments (or equity) is almost always a major requirement. Expect to pay higher rates on shorter term loans.

It really depends on your situation because hard money is more expensive money than a traditional mortgage loan. Origination fees and interest rates can be 3 to 4-times higher as well as down payments are higher or the home you are buying needs to be a really good deal.But, hard money loans can be fantastic when you need money quick to purchase a property and you are obtaining long-term financing within a couple months of taking-out the hard money loan.