1. Just what is a San Diego hard money loan?
Hard money loans, a.k.a. private money, are a type of loan funded by a private entity. This could be an individual, partnership or institution.
They are typically secured by a strong equity position in the underlying piece of real estate used as collateral. They are usually written with a low loan-to-value (LTV).
2. What is the difference between a hard money loan and a bank loan?
Conventional loans also know as bank loans are unwritten or evaluated by placing a significant emphasis on the borrower's income and the borrowers credit history.
Although both aspects of the loan application are considered when doing a San Diego hard money loan, more emphasis is placed on the underlying piece of real estate that is pledged as collateral.
In California (this may very state to state), the instrument by which a borrower pledges their property as collateral is called the Trust Deed.
The primary difference between bank loans and hard money or private loans is that the lender requires a larger equity position as collateral in San Diego hard money loans.
3. Are commercial properties and residential properties both eligible for hard money loans?
Absolutely! Hard money can be used for any type real estate: single family homes, land, apartments, industrial buildings, office buildings, and retail stores.
The steps taken to make a loan on commercial or residential real estate are similar. The concepts of value and equity between the two are significantly different.
4. Am I able to borrow California hard money if I have a bad credit score?
Most often, yes! As mentioned earlier, private money lenders still need to look at your credit report regardless of the project.
A hard money lender will want to look at your credit reports firstly because they want to calculate the amount of money you are currently spending servicing debt.
Secondly, they will assess your overall risk by judging the relative strength of your credit historically.
Most often if the other parts of your profile are strong you may still be eligible for a loan.
5. Hard Money Loans: Are there a variety of different types of loans?
Yes! There are different loans for different borrowers needs. There are hard money loans for cashing out on residential properties, rehab SFR loans, commercial loans, commercial rehab, construction, land and various private money loans for acquisition.
6. What will I need to give to my California hard money lender if I want to apply for private money loan?
The information required to underwrite a private money loan will vary depending on whether the property is question is residential real estate or commercial real estate.
Residential: Application, Credit Report(broker/lender provides), Appraisal, 2 months bank statements of assets, Proof of Income for one to two years.
Commercial: Application, Executive Summary, Pro Forma, Appraisal, Principals Financials, 2 Years Proof of Income.
7. How much does San Diego hard money cost?
The interest rate will vary depending on the transaction. For example, the type of property will affect the interest rate, commercial vs. residential.
The interest rate will also vary depending on the following; lien position, term, credit worthiness of the borrower and property condition. Generally speaking the interest rate could range anywhere from 9-16%.
8. What kinds of loan repayment schedules are available with hard money?
San Diego hard money loans can be made fully amortized, as well as interest only, balloon loans.
9. What type of loan term will I have?
The length of loan terms for private money loans are normally not as long as conventional loans. Every hard money lender will be different. Typical San Diego hard money loans are made from anywhere from one to five years.
10. Are prepayment penalties common in private money loans?
Each investor is different and each investor's terms will vary from transaction to transaction. When applying for any loan it is a good idea to inquire about eliminating a pre-payment penalty from your loan terms. - 30462
Hard money loans, a.k.a. private money, are a type of loan funded by a private entity. This could be an individual, partnership or institution.
They are typically secured by a strong equity position in the underlying piece of real estate used as collateral. They are usually written with a low loan-to-value (LTV).
2. What is the difference between a hard money loan and a bank loan?
Conventional loans also know as bank loans are unwritten or evaluated by placing a significant emphasis on the borrower's income and the borrowers credit history.
Although both aspects of the loan application are considered when doing a San Diego hard money loan, more emphasis is placed on the underlying piece of real estate that is pledged as collateral.
In California (this may very state to state), the instrument by which a borrower pledges their property as collateral is called the Trust Deed.
The primary difference between bank loans and hard money or private loans is that the lender requires a larger equity position as collateral in San Diego hard money loans.
3. Are commercial properties and residential properties both eligible for hard money loans?
Absolutely! Hard money can be used for any type real estate: single family homes, land, apartments, industrial buildings, office buildings, and retail stores.
The steps taken to make a loan on commercial or residential real estate are similar. The concepts of value and equity between the two are significantly different.
4. Am I able to borrow California hard money if I have a bad credit score?
Most often, yes! As mentioned earlier, private money lenders still need to look at your credit report regardless of the project.
A hard money lender will want to look at your credit reports firstly because they want to calculate the amount of money you are currently spending servicing debt.
Secondly, they will assess your overall risk by judging the relative strength of your credit historically.
Most often if the other parts of your profile are strong you may still be eligible for a loan.
5. Hard Money Loans: Are there a variety of different types of loans?
Yes! There are different loans for different borrowers needs. There are hard money loans for cashing out on residential properties, rehab SFR loans, commercial loans, commercial rehab, construction, land and various private money loans for acquisition.
6. What will I need to give to my California hard money lender if I want to apply for private money loan?
The information required to underwrite a private money loan will vary depending on whether the property is question is residential real estate or commercial real estate.
Residential: Application, Credit Report(broker/lender provides), Appraisal, 2 months bank statements of assets, Proof of Income for one to two years.
Commercial: Application, Executive Summary, Pro Forma, Appraisal, Principals Financials, 2 Years Proof of Income.
7. How much does San Diego hard money cost?
The interest rate will vary depending on the transaction. For example, the type of property will affect the interest rate, commercial vs. residential.
The interest rate will also vary depending on the following; lien position, term, credit worthiness of the borrower and property condition. Generally speaking the interest rate could range anywhere from 9-16%.
8. What kinds of loan repayment schedules are available with hard money?
San Diego hard money loans can be made fully amortized, as well as interest only, balloon loans.
9. What type of loan term will I have?
The length of loan terms for private money loans are normally not as long as conventional loans. Every hard money lender will be different. Typical San Diego hard money loans are made from anywhere from one to five years.
10. Are prepayment penalties common in private money loans?
Each investor is different and each investor's terms will vary from transaction to transaction. When applying for any loan it is a good idea to inquire about eliminating a pre-payment penalty from your loan terms. - 30462
About the Author:
If you've enjoyed all the exciting information you read here about San Diego Private Money,you'll love everything else you find at San Diego Private Money Lender and What is Hard Money?
No comments:
Post a Comment