OK, so, you are thinking it may be time to look for a hard money loan. So, you go to Google, type in 'hard money loans", and you find a gazillion (is there really such a number) websites telling you how great their hard money loan is and how it will solve all your problems....read on, PLEASE!

A hard money loan is normally a resort, as a hard money loan is one of the, if not the most expensive loan available to a Borrower.

The Quick Course on Hard Money Loans

A hard money loan, or equity loan, is mostly made on the value of the property, not on a credit score. For that reason, the Loan to Value, or the loan divided into the value is normally kept below 75%. This low loan to value ratio gives the investor plenty of "breathing room" in case the Borrower does not re-pay the loan.

Since the main factor in determining the viability of a hard money loan is the property, the investor is quick to study the property to determine a value. In today's real estate market, many areas of the US are either "flat" or are declining in value. That being said, property owners should be prepared for a hard money investor to look at any appraisal with great care. I have seen many solid appraisals "cut" in value by a hard money investor.

Rates & fees

Rates are not pretty, nor should they be. The investor is taking a risk lending with little documentation, so they demand a higher rate of return on their investment. Fees typically range from 2 points to as high as 8 points. Rates range from 8% to 15%.

This is a quick course in hard money loans. So, just remember this, they are expensive and are based upon the value of your property, with a maximum value of 75%. That's it.

Donald Timms can be reached 24/7 at (805)754-1859.

Source: www.articledashboard.com