All You Need To Know About Houston Hard Money Lenders

Posted by Yafr Qqater in Business

What is the concept of a hard money lender?

Private developers who lend money at high interest rates that local banks can not.

Hard money loans are simpler to obtain and can be repaid almost instantly. Asset-based lending is a term used by real estate owners to describe this type of financing. The real estate becomes the loan’s collateral. These are not traditional loans and the underwriting standards used for private money vary significantly from those used by local banks.Visit Houston hard money lenders for more details.

Hard money is an option for those needing emergency funding or who have situations that need them to close fast in days rather than weeks for their money.

In most cases, credit ratings or poor credit are not a factor; however, there are some hard money lenders that do look at a borrower’s credit records and are credit oriented, but they are not credit-based lenders.

HMLs lend money to borrowers for 6 months to a year based on their own lending terms to borrowers who use it for a range of lucrative purposes. Bridge, refinance, construction, purchase, rehab, and other real estate loan forms are examples. Since hard money is more costly than conventional outlets (14 percent + interest rate and 2-10 points+ of origination fees), borrowers typically benefit financially by having it, but the higher interest or points are generally compensated by the financial advantage. When they can make $150k and pay $30,000 to use their money, the loan expense isn’t a problem. Would you use it if you could make $150k and pay $30k to use it?

What Sorts Of Conditions Are Available For Hard Money Loans?

The terms of these loans will differ from one private lender to the next. There may be an upfront application fee, a due diligence fee, and a commitment fee, which varies from lender to lender. They will usually fund a loan for 50 percent LTV on raw land and up to 50-70 percent LTV on finished goods, with an interest rate of 14 percent + (depending on what part of the world you are in at times) and a six-month to three-year term. They will also charge an origination fee of 2-10 points, which will be deducted from the proceeds. Interest-only or amortised loans are also options.

Such lenders will cover interest, origination costs, rehab funds, and so forth, while others will not. Finally, when choosing an HML, borrowers must consider how these choices would work into their plans.

Contact Info

Priority Investor Loans
3100 Weslayan St #315, Houston, Texas 77027
713) 444-7388