Hard money loans are specific type of asset-based loans which a borrower receives funds and is secured by the value of a parcel of real estate. Hard money loans are typically issued by private individuals/investors or companies. Interest rates are usually higher than conventional the lenders. Most of loans are typically used for projects lasting a few months to a few years. It is similar to a bridge loan, which has similar criteria for lending as well as cost to the borrowers. The major difference is that a bridge loan refers to a commercial property or that may be in transition and does not yet qualify for a traditional financing, on the other hand hard money often refers to not only an asset-based loan, but possibly a distressed financial situation, like arrears on the existing mortgage, or where bankruptcy and foreclosure proceedings has occurred.
If you are in need of loan, there are a numerous different types that you could consider. Here are some of the different kinds of lenders.
- Commercial Banks
One type of lender that you could look is commercial banks. These types of banks are going to offer different lending programs. If you run a traditional business, you could get a hard money loan from this type of establishment in order to expand your business.
- Mortgage Banks
If you need mortgage loans, you might want to check see a mortgage bank. These hard money lenders can provide the money that you need in order to buy a property. When you get a hard money mortgage from a mortgage bank, you are not going to be using this as a long-term solution. Normally, the terms are very short, and you will have to come up with a balloon payment at the end of the mortgage term.
- Mortgage Brokers
Another type that you might want to consider is a mortgage broker. They have a variety of different lending sources that they can be use to get you the best deal possible. With that type of broker, you will to be able to secure the money that you need in order to purchase a property.
- Finance Companies
There are numerous different finance companies that also offer hard money loans. These finance companies can provide you with the money that you need for nearly any project.
- Online Lending Companies
One of the best and easy options for you to check out is online lending company. There are many different lenders that do business online. With the ability to work with online lenders, you will be able to conduct business with comfort from your home. You will also be able to shop around very easily and make sure that you have a best deal. When you are looking online, make sure that you find lender that does business in your geographic area. Many lenders are licensed to do business only in certain states, and you do not want to start the process if they cannot finish it.