They are good to get you in. I usually use them if I can get a discount on the price to close quickly, as the usual cost is around 25% of the amount loaned. The fees, exit, and entry points are high, but it does get you the quick cash that you need to do the deal. I prefer private monies, but they arent always available. The one good factor is that you can make interest only payments.
Hard money is generally short term (1 year or less) financing and can be extended for greater periods of time like five years. This is provided for those who need immediate funds and do not have the time to wait for conventional funding. This is also provided to those with less than stellar credit but the deal itself makes sense. Finally it is also used for rehab finance. Lenders hate to have loans paid off within a year closing. This barely covers the cost of originating the loan. They typically expect 3-10 points (1point =1% of loan value) and charge higher interest rates of 8-18% depending on the situation and the lender.
Respectfully,
Phil
Phillip Herrejon
312.375.7132
**Please See My Profile**
They are good to get you in. I usually use them if I can get a discount on the price to close quickly, as the usual cost is around 25% of the amount loaned. The fees, exit, and entry points are high, but it does get you the quick cash that you need to do the deal. I prefer private monies, but they arent always available. The one good factor is that you can make interest only payments.
Good Luck,
Kyle
Sorry, but what is hard money?
Hard money is generally short term (1 year or less) financing and can be extended for greater periods of time like five years. This is provided for those who need immediate funds and do not have the time to wait for conventional funding. This is also provided to those with less than stellar credit but the deal itself makes sense. Finally it is also used for rehab finance. Lenders hate to have loans paid off within a year closing. This barely covers the cost of originating the loan. They typically expect 3-10 points (1point =1% of loan value) and charge higher interest rates of 8-18% depending on the situation and the lender.
Respectfully,
Phil
Phillip Herrejon
312.375.7132
**Please See My Profile**