What is the right loan for you?

Private money loans, or hard money, 

ypically higher rates

Looser guidelines

relationship based

not credit based

higher down payments

shorter terms

can have a prepayment penalty

condition of the house is not always an issue.

The future value can be used.

Exit strategy is needed (how are you getting out of the loan) 

are you selling or refinancing?

A private money lender is a non-institutional (non-bank) individual or company that loans money, generally secured by a note and deed of trust, for the purpose of funding a real estate transaction. 

There can be many uses for a Private Money Loan (PM). The basics behind the loan make it versatile.

  • No debt-to-income ratio (DTI) - PM loans are based off the property's equity and borrower's occupancy. 
  • Distressed properties - properties in repair or damaged - basically property that does not meet conventional guidelines (will not pass an appraisal review). There are many ways a house cannot qualify for a standard loan and the PM loan ignore these traditional pitfalls and focuses on current and even future equity in the property. They do not want you to default, but if you do, there is plenty of equity to capture.
  • Fast Money (15 days is average) - helps with getting offers accepted.  Having a PM lender in your pocket can give you an advantage.
  • Property types - PM can do residential, mixed use, commercial, apartments, etc.  The PM loan is incredibly flexible.
  • ​PM loans are useful for investors, self employed people and cases where the property is in distress.
  • No credit score requirements.
  • Prepayment penalties are an option
  • Terms are usually 18 months but can be negotiated.
  • Etc...

Exit Strategy:

No matter why you use a PM loan, you must have an exit strategy, otherwise, you could lose your property.  An exit strategy can be selling or refinancing.  If your plans are to refinance out of the PM loan, make sure to get pre-approved in advance.  Otherwise, the last option will be to sell.

Let us know if you have any questions about Private Money Loans.

What is a Private Money loan?

Pardon the work in progress.  More to come.

Contact us if you are interested in more information about private loans.

Loan Programs: Private money