Hard Money Blog

A hard money loan is a type of loan that uses property as collateral from the borrower, rather than checking their income or credit history. hard money loans work best for borrowers who could not qualify for conventional loans because of bad credit or insufficient credit history.

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A variety of lending money drives are available, each catering to a specific borrower needs.

Credit Enhancement Loans

These loans are specially designed for borrowers who can not take the conventional loans. This may be because of not having enough credit or credit has been damaged in recent foreclosure or bankruptcy.

For these borrowers, hard money loan is a dual purpose: it gives them the financing of projects they need, and you have the opportunity to improve their credit and eventually get a more stable loan.

Development Loans

These hard money loans which the borrower to purchase a property in order to improve and expand it. Funds are available for the interest paid that money is delivered.

The loan amount depends on the overall proportion of ready-to-value (LTV), which changes with time as the value of property improvements increase.

Construction Loans

One of the most valuable hard money loans, construction loans are intended for the construction or rehabilitation of buildings.

Land used for construction, and property under construction, used as collateral for the loan.

Lenders can finance up to 100% of project cost, but often provide funding in amounts that vary with the progress of the project.

Mezzanine Loans

This type of debt is real hard money loan is subordinate to another loan. The borrower repays the loan once the capital of the stack is sold or a renewal.

The main advantage of these loans is that they are very flexible structures; borrowers can also combine debt and equity capital to increase its influence.

Acquisition Loans

A loan of money used to purchase hard to acquire assets, mostly real estate. It is mainly used by businesses who need the goods, but can not afford regular financing, or who can not afford to wait for that.

Hard money loans in this case acts as a sort of bridge loan gives them a temporary support for a long term plan is being prepared.