Hard Money Mortgage Loan in Southern California

The Hard Money Home Loan is a type of loan that is secured by real property. Hard money home loans can be used for a purchase, refinance, short term bridge loan, fix and flip, or stave off a foreclosure with a foreclosure bailout loan. These loans are used in real estate transactions with the lenders, often being individuals or private companies.

Typical Hard Money Home Loan Uses

• Bridge Loans: This is a short-term loan that bridges the gap between buying and selling a property.

• Fix-and-Flip Loans: This is a home loan to purchase distressed property that otherwise wouldn’t qualify for traditional financing due to being inhabitable. These loans are often used to renovate and sell the property for profit.

• Land Loans: This loan is used to purchase vacant or raw land for development.

• Asset-Based Loans: These loans are secured by the value of the asset, such as commercial property, a business, or an estate.

• Foreclosure Bailout: This loan is equity based and uses the property as collateral to stop the trustee sale, bring the loan in default current with a new home loan, and protects the equity in the property. The borrower retains the property. This loan can be used for owner occupied, second home, commercial or investment properties. This loan is risky for investors and each scenario is evaluated on a case-by-case basis.

Typical Hard Money Loan Terms

• First, second, and third trust deed accepted.
• Most often have a 6-month pre-payment penalty.
• 60-70% max close loan to value (CLTV).
• Letter of explanation (LOE).
• Ability to repay (Source of income or reserves)
• Can be used for owner occupied, non-owner occupied, investment, and commercial properties.

Hard Money Home Loan Interest Rate and Fees

• Hard money loans are risky for the lender.

• This type of home loan comes with a higher rate of interest and loan fees.

• The interest rate can range from 10-15% based on LTV, location, and if the loan will be a 1st, 2nd, or 3rd trust deed.

• Hard money loan fees range from 4%-10% based on the risk and home loan size.

Benefits Of The Hard Money Home Loan

• Speed. Funding often can be complete within 7-10 business days.

• No minimum credit score or credit requirements.

• No employment required.

• No underwriting requirements.

• No assets required.

• Bankruptcy OK.

• Foreclosure OK.

• Missed payments OK.

• 1st, 2nd, and 3rd trust deeds OK.

• Up to 70% CLTV.

• Foreign national OK.

• Distressed properties OK.

• Cross collateralization OK.

The Bottom Line

Hard money loans provide investors with quick funding to capitalize on an investment without the red tape and 30-45 day closing period that goes along with traditional bank financing. Flippers, developers, and real estate investors who plan to renovate and resell the property being used as collateral often use hard money financing. The funding is fast, can be used for anything, and strictly collateral based. The hard money home loan is a great lending solution with flexibility and speed. Ask your Arbor Home Loan expert about a hard money home loan today!

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NMLS 1206543 & DRE 02128292

Arbor Financial Group. NMLS Entity ID #236669. DRE #01845041

Licensed In: CA, FL

NMLS 1206543 & DRE 02128292

Arbor Financial Group. NMLS Entity ID #236669. DRE #01845041

Licensed In: CA, FL