Thursday, 22 March 2012

Qualification For Hard money Loans

It is hard to tell them exactly what the qualifications are for financing their project. There are certain qualifications that are necessary before any traditional lender will approve the loan. Things such as credit and employment come into the picture as does the question of the value of the collateral. California Hardmoney Lenders weigh a few things before they make the decision to invest in a property.

Equity in the Property:

Hard Money lenders must consider is the loan to value ratio between the value of the property and the amount the borrower is seeking. Typically a hard money loan is all about 60-65 % of the property value. If the borrower needs more than that and has additional properties, the lender may agree to a lien on another property provided that property has no previous.

Liens Position:

Because of the uncertainty in today’s real estate market, hard money lenders are not making second mortgages and will require that their loan be a lien in the first position. The loan will be secured by deed of trust and recorded to securely establish that position.

Income Requirement:

A person might seek out California Hard Money Lenders is because they do not have the credit score necessary to the qualify for the traditional loan. Hard Money lenders are interested in the value of the property and not weather is not the borrower has good credit. If your credit is borderline and you don’t want to spend time waiting to see if traditional lender will provide the funds you need, hard money loan is viable option for that.

Down Payment:

Though there are programs that do not require down payment they are fewer than ever. Most purchase hard money lenders require a down payment. For this reason it is good to be prepared to invest 20% to 30% in your projects. Because there are so many projects available yet funds are limited a down payment makes your project easier to fund.

Have an exit strategy:

Hard money loans are typically short term and usually are 1-2 years in length. The lender wants to know that the borrower has a plan for either selling or refinancing the property before the term is up. Knowing how you plan to repay the loan is a key factor in a hard money lender's decision.

Hard money loans have been an interlace factor in helping people achieve their dreams of obtaining funding for commercial, industrial, multi-family, business expansion, and much more. 
If you have any query about California Hard Moneylenders/loans feel free to contact with us at  .

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