The Basic Tips On Hard Money Lending

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At last! The golden real estate deal that you are looking for have already crossed your path. But what if you do not have enough resources to get the needed money for the deal in time or your bank is unable to provide to you the needed financing for the property to be yours? Will you just stand down and do nothing or will you find another way to obtain this golden real estate properties? Here’s a good read aboutĀ twin cities hard money lending, check it out!

One of the available option for you is hard money loan provided by reliable lending companies such as Minnesota private lenders. Hard money loan is a type of loan where in the funds received by the borrower is being secured by the value of a portion of the real estate property that the borrower is buying. In terms of property acquisition especially real estate purchases that requires money in a very short period of time this particular lending method could prove to be very helpful. Although this might be the case, you should not right away jump into availing of hard money lending since you need to have several important factors to be considered before availing of one. To gather more awesome ideas onĀ minneapolis private lenders, click here to get started.

The Cost

When it comes to hard money lending, lenders such as Minnesota hard money lenders gives greater importance on the property value that has been put up as a collateral over the credit profile of the borrower, and aside from that these particular lenders charge a far greater rate compared to Banks due to the short turnaround time that the money is needed. The lending rate then does not apply to the rate that the banks charges. Therefore hard money lenders charges they are right depending on the real estate market status and the hard money created available. The particular rates of hard money lending ranges from 12 to 21% as an upfront charge and will lead to higher default rates in the event that borrowers will not be able to meet the payments in time. Even with a higher rate compared to banks, a borrower that is availing of hard money lending must secure that the charge rate being charged by the lending company is within the normal market standard charges range.

Lending Amount

Before any commitment is made to a hard money lending contract the borrowers should know that the lending amount must be of a loan to value basis and not a loan to value ratio that banks uses. The loan to value ratio of the hard money lending that you are going to have must be within a 60% range as this is the usual and normal LTV ratio.