It has been a long time but we are finally above the 2005 peak of values. Some locations reached this level earlier but now everywhere is there. Home owners who felt trapped by their low
Hard Money Lenders Plus And Minus
Dated: February 20 2019
It seems now that many properties are being purchased for cash. Sometimes that cash is really money from a "Hard Money" lender. What is a "Hard Money" lender? They are private individuals and entities (not banks) that loan money. Usually their requirements are:
FICO score 600-700
Corporation Status (not individually to people)
A factor, not really an interest rate.
These requirements make it easier for the "Hard Money" lender to foreclose in the event of a default. Allow for adequate worst case risk and finally keep clear of banking regulations. It is very important that a borrower understands the true terms of the loan. A lender may speak of a 10% loan but that is really a 10% factor. As an example if you borrow $100,000 you might pay 4 pts. 4pts means $4000 (4% of the principle). The lender will then expect you to pay back $104,000 plus 10% ($114,400) back in 6 months. This is not a 10% APR loan.
The advice today....be careful.
Next blog: Confessions of Judgments and how they can lead to financial ruin!