Hard Money Lenders -- "No Money Down" The Easy Way


 by: David Whisnant

Would it help you as a real estate investor to be able to "Close For Cash in Days," even if you're tapped out financially?

Hard money lenders are perhaps the best way to get 100% financing with easy qualifying, money for fix- up, and fast closings.

So what can hard money lenders do for you? Hard money lenders make relatively short term (12-24 month) loans to real estate investors for the purposes of acquiring the property and rehabbing the property.

These loans are often funded by pools of private investors that have been grouped together into a pool of capital by a lender.

The hard money lender is looking for maximum return, and is willing to take more risk for this return in the form of easier lending standards.

If you strike the right purchase deal, you can even borrow 100% of the purchase price plus some or all of your repair money by using hard money lenders. Here's how it works.

Hard money lenders typically loan 65% of the ARV or After Repair Value of the property when it is repaired or ready for resale.

That 65% loaned by the hard money lender is calculated based on the value of the property AFTER REPAIRS, not as it currently sits, and not based on the price is being paid for the property.

For example, Say that the owner is willing to sell me his house for $60,000. The hard money lender's appraiser agreed with my assessment that the home could be sold for $100,000 once it was fixed up. That appraisal would allow me to borrow 65% of the $100,000, or $65,000. I'm only paying $60,000 for the property, so guess where that extra $5,000 goes?

Unfortunately, not into my vacation fund!

The extra loan proceeds go into an escrow account held by the hard money lender, and I can draw it out as I do repairs.

Remember, hard money lenders are not concerned with your personal credit to the level that traditional lenders are. They're concerned with the property. They know that their loan is fairly secure if you default.

What's bad about hard money loans?

The fees are higher than conventional financing.

Hard moneylenders in my area charge 15% interest, and 5% of the value of the loan in closing costs ("five points").

Thus, on a hundred thousand dollar loan, there would be $5,000 in fees to the lender to close the loan, plus attorney's fees and other charges.

Secondly, the loans usually are only good for 12-24 months. After that time, you have to refinance. If you haven't sold it by then, you have to get a new loan, pay more fees, etc. These are not loans to buy rentals with.

Another disadvantage is the fact that most hard money lenders don't figure the payments on a 30-year basis. The longer the payments stretch out, the cheaper the payment. They figure these loans on 15 or even 10-year terms. Thus, the monthly payment that you must pay is much higher than it would be on a conventional 30 year amortization schedule.

Also, hard money lenders are often more difficult to find than traditional funding sources. As a gift, I have compiled a national list of hard money lenders at my site to solve this problem for you.

Finally, most hard money lenders require a pre-payment penalty that must be paid if you refinance or pay off the mortgage before a given amount of time. Fortunately, this time period is often fairly short. For example, the hard money lender that I use has a two month pre-payment penalty period. Even if I am not going to do much work on the property, and have a contract on it quickly, I can just set up the closing for after the pre-payment penalty expires.

In conclusion, hard money lenders present an attractive option for investors to succeed without having to resort to the late night TV creative hype that we've probably all been exposed to. If you can qualify for traditional financing, and your seller is comfortable with a longer closing window, you may want to stay with conventional financing.

However, if down payment money is tight and your credit is not perfect, or you need to close very quickly, hard money lenders may be a viable solution since they will allow almost anyone who can find a good deal to purchase a property extremely quickly, with less red tape, get money for rehab, and have virtually unlimited access to cash.

About The Author

Download Attorney and Real Estate Investor David Whisnant's FREE 50 state hard money lender list and forever banish the problem of where to find the cash for your deals! Go to http://www.realestateinvestingbrain.com/freehmlist.html

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Buying A Car ? What Is The Best Finance?

Buying A Car ? What Is The Best Finance?

 by: Joseph Kenny

Your car is one of the most expensive purchases you will ever make. Probably the only thing you will buy that costs more than your car is your house. You wouldn?t just accept the first mortgage you came across, and likewise you shouldn?t just accept the first vehicle financing option that comes your way. You will have a lot of options in how to finance your car.

You can buy the car outright. If you would like to opt for this, you will need to borrow the cash in the form of a bank loan.

This should generally be medium term, over period of about two to five years. It is generally not advised that you secure borrowing over your home but this may be necessary in order to get the loan or in order to get a better rate. Shop around for the best rate, from banks, other lenders and also on the internet. Rates will vary widely so it is a good idea to shop around as much as possible.

Leasing

If...

Buying A Car ? What Is The Best Finance?
Financing > Buying A Car ? What Is The Best Finance?

Cost Of Buying A New Car

Cost Of Buying A New Car


 by: Joseph Kenny

One of life?s joys is buying a new car. The excitement of looking through those glossy brochures, choosing the brand, model, colour, plus the features is incredible. Ask most men and I?m sure they?ll tell you it?s one of the things they enjoy most in the world. And these days, with women reported to be involved in over 80% of all new car purchases, women are getting hooked fast on the pleasure of buying a new car.

However, if there is one thing that can detract from the enjoyment of buying a new car, it is the finances of the whole deal. This is not just speaking about the price of the new car, although this can be considerable. There is also the issue of all the hidden, and not so hidden extras that you have to pay for. For example, before you finalise the price of the car, you have to find out what features come as standard, and if you want to have any additional features, be they for safety, power,...

Cost Of Buying A New Car
Financing > Cost Of Buying A New Car

Financing Basics

Financing Basics


 by: Matt Bacak

The term financing is commonly used to explain the acquisition of loans from banks or other financial institutions. Financing is usually provided to business owners, either to be utilized as start-up capital or to support an on-going business. Some businesses may require financing to help them through a rough patch, or simply to provide some liquidity until more current assets are turned into cash. Additionally, financing is also given to companies who are expanding their businesses rapidly and require the money to support their new operations and facilities.

Due the high interests and high risks that come with financing, small business owners are often compelled to evaluate their situation from all angles before making a financing decision. This is because there is a full range of loan types available in the market, each of them for different purposes and with different interest rates, repayment terms and loan...

Financing Basics
Financing > Financing Basics

Get a Better Mortgage Refinance Deal Than Your Local Bank Offers

Get a Better Mortgage Refinance Deal Than Your Local Bank Offers


 by: Mansi Gupta

Gone are the days when money could be fetched either by mere mortgaging or financing something. Now it is time to get money via an amalgam of the two i.e. Mortgage Refinance. Mortgage refinance is a smart idea to have a good credit sum and repay it in an easy fashion. In simple terms a refinanced mortgage is one where a borrower repays a previous loan by taking a new one. The main motive behind refinance mortgage is to get a lower interest rate, lowering their payments or to take cash out of their home equity. So basically in mortgage refinance refers to taking a secured loan to replace the existing loan that is secured via some assets of yours.

Let us first delve into the factors that instigate a refinanced mortgage.

There are several reasons that instigate people to opt for refinance. For instance

(a) Mortgage refinance reduces the interest rate...

Get a Better Mortgage Refinance Deal Than Your Local Bank Offers
Financing > Get a Better Mortgage Refinance Deal Than Your Local Bank Offers

A Mortgage Refinance with Bad Credit - The Pros and Cons

A Mortgage Refinance with Bad Credit - The Pros and Cons


 by: Monique Thomas

To many, the term 'bad credit' is the end of the world when it comes to getting financing in the near future. However, it doesn't always have to be like that, you can take the bad credit mortgage refinance option!

Mortgage refinance vs. equity finance

It is essential at the outset that you understand there is a fundamental difference between mortgage refinancing and equity financing. Basically, with equity financing you are using the surplus amount you may have stored up in your property between your outstanding mortgage amount and the appraised value of your home. However a mortgage refinance is where you find a new lender willing to lend you the whole appraised value of your property, the sum of which you then use to repay your existing mortgage lender and the remaining sum you can utilize in any manner you wish. Because of this, you are faced with a different...

A Mortgage Refinance with Bad Credit - The Pros and Cons
Financing > A Mortgage Refinance with Bad Credit - The Pros and Cons

Mortgage Brokers

Mortgage Brokers


 by: Dan Lewis

When applying for a home loan, it can be difficult to ascertain your options and the best deal out there. Mortgage brokers can help you shop for the best loan for your situation.

Mortgage Brokers

A mortgage broker is an independent professional assisting homebuyers with their mortgage needs. Instead of a loan officer for a bank, a mortgage broker typically works with tens or even hundreds of lenders. This independence lets mortgage brokers hunt for loans that fit the credit history and particular lending needs of a person.

Let?s assume you have less than stellar credit when you apply for a loan at ABC Lender. The lender pulls your credit report and determines you don?t qualify for any of the loans offered by the lender. The lender is going to drop you like a rock and move onto the next potential borrower.

Now, let?s make the same assumption regarding your credit score, but put a mortgage broker...

Mortgage Brokers
Financing > Mortgage Brokers

Buying A House After Bankruptcy - Things To Consider

Buying A House After Bankruptcy - Things To Consider


 by: Carrie Reeder

Bankruptcy can make getting any kind of financing much more difficult. However, it's not impossible anymore to get financing, even a few days after the discharge of a bankruptcy. But, is getting a loan soon after a bankruptcy a smart thing to do?

It can be tempting to buy a new home, new car, etc., after a bankruptcy discharge you have no debt left. You will probably feel like you can afford a larger house payment. Here are some factors to consider before committing yourself to a new house payment.

Pre-Payment Penalty - Almost every subprime loan (bad credit loan) now comes with a pre-payment penalty. This penalty is usually about 6 months worth of house payments. The pre-payment penalty period usually lasts 2-3 years. That means, if you want to refinance or sell your house in that period of time, that will make it very difficult, if not impossible to sell or refinance....

Buying A House After Bankruptcy - Things To Consider
Financing > Buying A House After Bankruptcy - Things To Consider