Hard Money is a type of real estate fund secured by the property owners. Majority of the hard money in Texas are short term funds of one year or even less. There are major differences between this type of loan and traditional loans offered by different institutions such as hedge funds, banks etc.
Also known as private money, these funds are offered by the private lenders or a organization. The lending criteria also differ in this type of fund. For example, most lending organizations fix their lending criteria on the basis of certain factors such as the ability of the borrowers to repay loan and so on. The money lenders emphasize the worth of property to determine whether to lend it or not. The total amount of money that the lender actually lends also depends on this factor. The key security is real estate property itself. In fact, the money lender should be comfortable with valuation of property before determining the exact amount of money to lend. The value is widely determined by individual appraisal. Normally, the lender can offer up to seventy percent of total value of property.
Advantages of Using a Hard Money Loan
These loans seem to be quite costly in terms of the rates of interest as well as the money charged as compared to the traditional loans. There are other benefits of acquiring the hard money in New York, Chicago or other places in the US. Unlike conventional funds, these funds are available fast and easily. You do not have to deal with paperwork and the processing seems to be hassle-free. Hard money in Texas also allows the property investors to avail excellent deals as compared to other investors.
Who are eligible to acquire the loans?
The house flippers as well as builders can make use of these deals since you are eligible to borrow almost one hundred percent of the total purchase price. The lenders who provide hard money often ask you to back the loans with assets. If you wish to buy property and wants to earn profit from it and you also are unable to get standard mortgage, then you must avail this type of funding option. In fact, few investors make use of hard money to buy property and get new loan deal from bank in order to pay the lender.
How do you apply for this type of money?
Once you decide that this type of loan is best for you then you should immediately apply for it. Like traditional loan you can also fill the application form as soon as possible. You must offer relevant details of your current economic condition and details of the property. Often these loans are offered on the basis of good mutual relationship you develop with your favorite lender. It is important that you develop good rapport with him and increase the scope of getting the loan without much delay. This kind of money widely varies in terms of amount as well as interest rates.
