1# Private Money Loan California and Why do I need that? What is a 1# Private Money Loan? A hard money loan is type of asset-based loan financing through which a borrower receives funds secured by real property. Hard money loans are typically issued by private companies and /or private investors. These loans offer many advantages such as quick closes of escrow, temporary financing to get ownership of the property, great option for people with less than good credit, and out of the box financing.
#1 Private Money Loans in California and why do I need that??
Hard money loans are a powerful tool for real estate investors. Some borrowers might not their financials in order and might need a quick close. They are very flexible, providing same-as-cash purchasing power. Hard money lenders are far less concerned with credit issues such as foreclosures, bankruptcies, late mortgage payments, etc., and have less stringent underwriting guidelines. Hard money loans are also the most viable option for financing renovations or other value add projects. Some lenders can close within 3 days with no appraisal!
What are the rate and terms of a #1 Private Money Loan inCalifornia?
Hard money loans have terms are normally 12-36 months, but can be longer. Rates are typically between 7-12%, but can vary due to type of asset, Loan to Value, and use. Mostly with interest-only payments so the month payment is low to make sure the payback to the investors. Fees charged on hard money loans will generally include 2-5 origination points, but also can vary on a case by case basis.
Types Real Estate Private Money Loans.
- Ground Up Construction
- Fix and Flip
- 1-4 Unit Residential Purchase
- Cash Out Refinance
- Commercial
Down fall of #1 Private Money Loan in California?
Even though the guidelines are less stringent, there are hard guidelines that must be followed. They are defiantly more expensive than a traditionally loan. You’ll pay points anywhere from 2-4% to close the loan. Some times there is a prepay depending on the terms of the loan. Larger down payment is required so the lenders have some equity to fall back on if they have to foreclose. Lastly, the borrowers will always have to have a exit strategy. Meaning when the term is close to becoming due the borrower will have to either pay the balloon payment(loan balance plus fees) or refinance into a traditional loan(takeout loan).
Myths about #1 Private Money Loan in California.
I heard that private money can have 100% Financing? —— NOT TRUE! No hard money lender will provide 100% financing. In fact, many hard money lenders will require a higher down payment than traditional lending sources. Otherwise, there would be no equity available to mitigate the risks associated with default.
Private Money are a scam to the borrowers and are very hard to payback the loan! —— NOT TRUE!!! Hard money lenders are looking for a return on their investment. In the event of default, they lose out on the money they lent out, time/effort to foreclose, and ultimately never recoup the initial money they put in. Hard money lenders do not want to foreclose.
To discuss call or email ADAM LAWRENCE
858-344-0323 or alawrence@valorlending.com
Other great programs Adam Lawrence can help you with:
- Hard Money Loans (20% down / minimal documentation) Typically Fund in 7-10 days.
- Stated Income Loans (Great for business owners and self employed ) No tax returns!
- 100% financing is available (we can cross collateralize other properties if there is enough equity)
- Valor VA Home Loan 100% financing up to $1.5MM
- Rental Property Loan – No tax returns or DTI calculation! Based on subject property cash flow – No DSCR Coverage needed!
- Flipper & Rehab Loans (Flip a property with one of our many options)
- 2nd Position Loans up to $5mm
- Raw Land & Lot Loans
- Ground up Construction for spec homes, custom homes and commercial ground up.
- Farms, Vineyards, Ranches and Agricultural Properties (25-30% down)
- 5% down Jumbo’s with NO MI up to $2mm / 10% down up to $3mm
- Manufactured Housing / Mobile Homes (20% down / 600+ credit score)
- Acreage Properties
- Commercial Loans up to $500mm
- 3% & 5% down Conventional Loans– LPMI (Lender paid mortgage insurance)
- Foreign Nationals Loans (no social security or residency required)
Check out more of what we offer. Check out Valor’s Mortgage News to learn more!
