Types of Hard Money Lenders
Hard money loans are basically a specific asset based loans wherein the borrower get funds and is secured by the value of parcel of real estate. Normally, companies or private investors or individuals are the ones issuing hard money loans. The rate of interests is often higher compared to the traditional lenders as well.
Majority of the loans are usually used for projects that last for several months to even years. Truth is, it’s almost the same to bridge loan as it carries the same criteria for lending and cost to borrowers. One major difference is that, bridge loan refers to commercial property or that may be in a transition and does not yet qualified for a traditional financing. When it comes to hard money however, it’s deemed not only as asset based loan but also, a distressed financial situation including bankruptcy, arrears on existing mortgage as well as foreclosure on proceedings occurred.
There are different types of hard money lenders you may consider if you need loan and following are some examples:
Number 1. Commercial banks – one kind of lender that you may turn into if you need money is commercial banks. There are many lending programs that you can apply for in these banks and say that you have a traditional business setup, then you can apply for hard money loan on these financial institutions to grow your business.
Number 2. Mortgage banks – if ever you need mortgage loans, then you may want to check a mortgage bank. These hard money lenders are providing money needed to buy a property. The moment that you have decided to get money from a mortgage bank, you shouldn’t be using this as long term solution. Oftentimes, the terms are short and you’ll need to come up with balloon payment right at the end of your term.
Number 3. Mortgage brokers – another popular type of hard money lenders you may try is mortgage broker. They have wide varieties of lending sources that can be used in getting the best possible deal. With this type of broker, you will be able to secure cash that’s needed to buy a property.
Number 4. Finance companies – there are many different types of finance companies that function as hard money lenders too. Regardless of the project that you need funding for, such finance companies can provide you the funds you need for it.
Number 5. Online lending companies – among the best and the easiest options you can have is checking out for lending companies online. This is due to the reason that it makes things more convenient for you as starting from the loan application to paying it, all of it can be done online.