|Los Angeles hard money lenders|
If you are new to private money financing or most commonly hard money loans, this article will clarify what private funded equity based lenders is all about. The term has been changed a little bit. Today Los Angeles Hard Money Lenders don’t need to be expensive if there is a right combination of factors.
What hard money (equity base lending) means? And what is hard money loans meant for? Following are some answers to the question.
1. For borrowers hard money loans are intended for more down payments (equity) in the property than traditional lenders and banks acquire.
2. Hard money loans are intended for short term as a substitute for long term bank loans.
3. LosAngeles Hard Money Loans don’t require recent history of credit, limited credit, late payments, judgments and foreclosure.
4. They are popular among foreign national (non US citizenship).
5. Borrowers who are in need of financing during a probate proceedings.
6. Because of lack of employment duration, career shifts, and employment gaps which normally banks don’t allow.
7. You are in need for construction or renovation funds for property investment because banks don’t offer construction loans now days.
8. You have owned 4 to 10 concurrent properties.
Interest rates vary from 7 to 12% depending on variety of factors like low LTV (loan to value ratio), which is primary determination factor. If you are borrowing only 20% of the property, you will pay less for loan as compared to someone who is borrowing 70% value of property.
There are private lenders that still making loans today without caring about credit scores or previous credit history while making a loan. The new generation hard money lenders offers pricing discounts for borrowers with a better credit scores and elapsed time from prior derogatory events such as bankruptcy, foreclosure, short sale etc. Judgments, unpaid taxes, and delinquent court ordered payments must be paid with new loan or prepaid in cash before funding.
Points and fees
Fee to the lenders and broker arranging the loans are involved in lending hard money loans. Points charged for hard money varies but there is no such thing as “no point’s hard money loans”. Other fees payable are to title escrow recorder, title insurer, and third parties which vary by vendors.
Loan to Value
You will have to pay 25 to 50% down payment plus points and lenders fees if you are purchasing property. This amount will also vary depending on the lenders and other factors like property type, location, prior credit history, accompany etc. Hard money loans are predicted on protective equity in the property at closing, therefore there are no low down payments hard money loans.
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