Understanding the Elements of Residential Hard Money Lending

Bauer | March 4, 2019 | 0 | Financial Services

Residential hard money lenders basically ignore the credit rating of a borrower, rather issuing out loans based upon single family home or duplex considerations. Various terms are applied when referring to “hard money”, including personal loans, private loans and bridge loans. They all work the same way however where the underwriting process is dependent upon hard assets of the borrower available. The lender in such case utilizes real estate as collateral for performing a transaction. Processing a loan can take a little as between 3 and 4 days, depending upon the circumstances present. People who require this type of assistance can consider approaching the services for residential hard money lending Los Angeles California offers.

How Residential Hard Money Borrowing Differs from Bank Loans

Applying for a bank loan requires that the borrower adduce proof of income, tax returns, credit score, financials and appraisals among other important credentials. One also at least needs to have a typical minimum FICO score of 700. You might also require providing cash in upfront fees to facilitate the application process. A limitation exists too in that one can only apply for loans involving investment and owner-occupied properties. In addition, a request for loan is capped on the amount of loan and number of properties in which one wants to invest. The entire procedure takes over 60 days in typical fashion.

Residential money lenders by contrast consider a piece of residential real estate as the basis for approving a loan. One only requires signing a few documents to have it processed as well. The amount which can be borrowed also varies with different lenders. Some lenders even ignore the credit history and scores of lenders altogether. Certain residential money lenders waive upfront fees too. The entire procedure for loans to be processed takes less than ten days in general. It is also critical noting that personal money lenders present a broad range of requirements touching on how much they can lend; the types of real estate they can consider as collateral as well as minimum and maximum sizes of loans they offer. One can access seasoned agencies for hard money lending Los Angeles California has for investing in residential properties.

Assessing Residential Hard Money Borrowing Loan-Opportunities

All credible bridge money lenders have to be certified by both the regulatory agency operating within their states along with the National Mortgage Licensing System, or NMLS. Potential borrowers need to verify the license of a lender via the NMLS to keep from experiencing problems at closing. Many states require that the license number of lenders be listed on loan-documents. As well, borrowers need to ensure reviewing various aspects pertinent to the loan with care. They include the lender’s interest rate, loan to value, prepayment penalty, default rates, work out solutions, APR and points or loan-fees. Utilizing the opportunities for hard money lending Los Angeles California offers for instance is a credible way of obtaining residential loans.

Certain hard money lenders engage in direct lending of their own funds without charging any advance fee. Loans of up to 10 years and longer can be provided by residential hard money lenders too. It affords borrowers the flexibility they require of maximizing their opportunities on a given piece of residential property.

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