Hard money lenders in San Diego are lending companies offering a specialized kind of real-estate backed loan. They lend short-term capital (also referred to as bridge loans) that supply funding depending on the value of real estate in the role of collateral. Hard money lenders tend to concentrate on the price of the collateral property rather than borrower’s ability to repay based on their own personal income or assets, which is common with other traditional lenders. Hard money lenders typically charge greater rates of interest than banks because they fund deals that do not conform to bank standards such as verification of borrower’s income, assets, or the person’s credit rating.
Hard money lenders will give you a variety of requirements about how much they’re going to lend (loan to value), what types of property they’re going to lend on (commercial, residential, multi-family, land) and minimum and maximum loan sizes. Call one of our specialists to learn more about hard money loans.
The collateral for the loan is asset-based which refers back to the property that’s used to secure the money. This could include residential, multi-family, commercial, or raw land properties. However, it can include other assets of the person or business borrowing the capital. In many cases a hard money lender will give you a reduced loan size based upon a lower “Loan to value ratio”. Therefore they could lend a lower number of the home value. It is therefore common for real estate investors to make available additional property as collateral so that you can get a larger loan amount. This is what’s called cross-collateralization. To speak with a San Diego hard money lender call the number provided and discuss the details.
Hard money lenders in San Diego cost more than traditional loans since they’re not based upon traditional credit guidelines which protect investors and banks from high default rates. As hard money lenders might not exactly require income verification that typical lenders require, they could experience higher default rates (and, thus, charge better pay of interest). Individuals and firms may choose to require a hard money loan once they cannot obtain typical mortgage financing since they don’t have acceptable credit or any other documentation typically essential to a conforming loan. However, federal law now requires that all hard money lenders verify “ability to repay” – per the Dodd-Frank Act of 2010 – on all house loans.
Term of loan: hard money lenders are generally of a shorter-term than conventional loans, although you’ll find terms all the way to decade with regards to the lender. As a result of a shorter-term, borrowers should ensure they have the resources necessary to pay off the money if this becomes due. Thanks for visiting our hard money lenders San Diego post.