Hard Money Rates for Real Estate Investors | Nationwide Direct Hard Money Lender
A Hard Money Loan is one of the most popular programs that real estate investors utilize for their real estate investments. Regardless of the type of real estate investor you are and your loan scenario, there is an array of loan programs that are designed to meet all your mortgage needs.
Where can you receive a Hard Money Loan?
Stratton Equities provides hard money loans nationwide to Real Estate Investors around the country.
What is a Hard Money Loan?
A true Hard Money Loan, is an asset-based loan, which means the financing is based on the Loan to Value (LTV) of the Asset. Unlike the Fix and Flip loan, it doesn’t go through full underwriting and there’s no minimum FICO requirement for the borrower, as it doesn’t have many guidelines and criteria. (Although your credit report score does not matter, you will still need to obtain a credit report.)
This type of loan doesn’t have as many restrictions as one might think considering that it’s just money, so no more having to worry about bankruptcies, foreclosures, collections, etc.
Due to the lack of guidelines and underwriting, a true Hard Money Loan is generally capped at 65% LTV or less. For example, let’s say you have a home worth $1M, if you want $500K against it (50% LTV), you’re able to receive the money within 1-2 weeks (from day of application), commonly as a first lean position - because it’s just money. It’s normally in the form of a Bridge Loan, which is short term financing in a period of 12-24 months.
One of the reasons why Hard Money Loans are for investment properties ONLY, is due to the high cost regulations and predatory lending – you can’t put such high interest rates and cost on an owner occupied property.
In certain states, there are non-judicial foreclosure laws, which allow a Hard Money lender to get their money back quickly if the borrow defaults on the mortgage.
These foreclosure laws make the lender more comfortable doing high-risk loans, usually the money is not sold on the secondary market – the lender holds the note, they don’t sell the paper.
Why Should You Use a Hard Money Loan?
The main reason for Real Estate Investors to use a hard money loan, is the ability of the hard money lender, like Stratton Equities, to fund the loan quickly. With Stratton Equities, a hard money loan can be funded within two weeks, compared to the 30 – 45 days it takes to get a bank loan funded.
Also, borrowers may choose to utilize a hard money loan, due to the fact that they have been rejected by the banks for a conventional loan because of bad credit, insufficient income history, foreclosure, etc. As Stratton Equities is Hard money lender, we are able to look past these issues as long the loan be repaid and the borrower has enough equity invested in the property.
Once a borrower has a property and is interested in applying for a hard money loan, the application process takes a day or two and in some cases, a loan can be approved within 24 hours.
Real estate investors choose to use hard money loans for many different reasons; it's fast, flexible, and functional. For the top 3 reasons to use a Hard Money Loan, watch our Top 3 Reasons to Use Hard Money Video.