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Hard Money Loan - A hard money loan is a specific type of
asset-based loan financing
in which a borrower receives funds secured by the value of a
parcel of real estate. Hard
money loans are typically issued at much higher interest rates
than conventional
commercial or residential property loans. Many hard money
mortgages are made by
private investors, generally in their local areas. Usually the
credit score of the borrower is
not important, as the loan is secured by the value of the
collateral property. Typically, the
maximum loan to value ratio is 65-70%. That is, if the property is
worth $100,000, the
lender would advance $65,000-70,000 against it. This low LTV
provides added security
for the lender, in case the borrower does not pay and they have to
foreclose on the
property. |
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Equal
Housing Lender