The Power of Commercial Hard Money Loans
Commercial Hard Money Loans
A commercial hard money loan is a private lending alternative for real estate investors and small business owners. In the event of a hard money loan, the private investors/lenders will lend their money to borrowers with the property held as collateral. Commercial Hard Money Lenders are in the business of making real estate loans to individuals and investors alike who are either unable to acquire a conventional commercial loan from a bank, or need expedite the closing process of the loan in order to capitalize on investment opportunities.
Commercial hard money loans are typically short term. Many hard money lenders earn business based on speed, and considering the large amount of cash chasing commercial hard money loans these days, hard money lenders
Hard Money lenders really don’t look at credit, but income can be crucial. Commercial Hard money lenders accept borrowers that had foreclosures, bankruptcy, mortgage lates, collections, etc. Income will be verified through borrowers bank statements. Since we know that most self employed professionals never really report in the tax returns most of their real income. Hard money lenders need to verify that Borrowers can make the payments before they can get any money.
Hard money lenders normally generating their income from points they charge during the escrow process. Income can be generated also from the interest rate being charged on the mortgage, so the hard money lender will charge 11% on the loan and the trust deed investor will get 10%- In this scenario the hard money lender makes 1% spread. Rates are normally between 8%- 12%, points start at 2.5 from the loan amount.