Hard Money Lending Doesn’t Have To Be Hard

Hard money lending doesn’t have to be hard…………


Many of the hassles, delays, strict underwriting guidelines, red tape and numerous items requested by traditional banks are eliminated with a hard money loan.  Since hard money loans are funded by private individuals or companies like Private Financial, Inc, using their own money, they have far less regulations to contend with.  Hard money loans are an alternative to the strict and narrow traditional bank (conventional or institutional) financing.

Hard money lending is known by many different names, such as Private Money Loans, Equity Loans or Asset Based Loans.  These private equity loans are secured by a recorded first Deed of Trust against the subject property and/or collateral in another piece of real estate with at least 35% to 40% or more equity in the property.

Private Money Lenders base their loan decisions on the amount of equity in the property, its marketability, the ability to repay the loan and the Borrower’s exit strategy.  The bottom line is, “Does the deal make sense.”

Many of the hassles and delays and strict underwriting guidelines of the institutional lenders are eliminated, such as credit scores and income verification.  Funding is very fast – usually 5 to 12 days after receipt of the application – which is a true advantage over traditional bank financing.

Private money loans have a higher interest rate for the borrower for the simple reason that they also pose a higher risk for the lender.  They are most often a temporary solution that opens doors for a more permanent financial solution or exit strategy.  Hard money lending offers a degree of flexibility that is just not possible through traditional lending sources.

Jeralyn Sommers
Private Financial, Inc.
Real Estate Broker
CA. BRE # 01952914 / 01047826
NMLS # 1172916 / 290528