Know the power of hard money
Jun 2nd, 2010 | By Ernie Brown | Category: LoansHard money loans are property loans designed for rapid availability, which allows borrowers to either take advantage of an emerging opportunity or protect themselves from a pending problem.
Hard money loans almost always apply to commercial property, and allow advances typically up to 70% of the property value to be made available to the borrower. These loans can close in days rather in weeks or months.
How can hard money help you? Hard money has been used to buy property, capitalize projects, pay off pressing notes and obligations, and mobilize companies.
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Hard money and bridge loan rates include the following:
1.) A closing or transaction fee. These often times vary from 2% up to 4% of the amount borrowed but we’vee seen high risk lenders command as much as 12%. Note the word ‘risk’ as this usually determines this closing fee.
2.) Interest rates vary from lender to lender – end. They are going to charge based on their risk and this is typically on the low side @ 12% per annum and can go as high as 18% per annum.
A key need in a hard money loan: You must be prepared to provide an exit strategy and show the ability to keep the loan paid (more often than not the interest!).
Most of these loans are written for a year or less otherwise renewwal fees are charge on the anniversaries.
If i can answer anything else let me know!
Ernie