Ins and Outs of Hard Money Lending

At last! The ideal land opportunity has come your direction. On the other hand, what do you do if your bank decline to give the account expected to secure the arrangement? You can either grieve your hard good fortune, or you can investigate different choices. An alternative that ought to be considered is a hard cash advance. This is an advance that is secured against the property.

Taken a toll

The rate charge by hard cash moneylenders is ordinarily far more noteworthy than banks, which is justifiable given the short pivot time and looser loaning criteria – the credit profile of the borrower is not as essential as the advance depends on the estimation of the property that is set up as guarantee.


It is essential to realize that hard cash moneylenders are liable to offer less finances on an advance to esteem proportion than banks. While banks recently are diminishing their loaning sums additionally, hard cash moneylenders would infrequently loan more than 60% LTV. This lower advance to esteem sum gives more security to the hard cash loan specialist as they can abandon the property,


Previously, hard cash loaning just like the center of some solid reactions with respect to its charge structure and practices. Frequently, a forthright expense will be charged to complete an examination of the credit demand. This is not completely absurd however there have been cases where firms will decline to loan on essentially all exchanges while keeping this expense.


Hard cash credits regularly can be shut inside of 30 to 45 business days if the advance is as of now in procedure with a bank. This fast time period can give a considerable measure of adaptability to supports. Utilizing hard cash advances can permit supporters to tie up and close arrangements rapidly commonly giving a chance to arrange great “all money, brisk shutting” rates with forced dealers or banks.


By and large, the main practical distinct option for utilizing a hard cash loan specialist is to get a value accomplice and give away a rate of the arrangement. One needs to pose the question notwithstanding; “Is the costly subsidizing justified, despite all the trouble keeping in mind the end goal to spare giving without end a bit of our land or organization”.

What You Need to Consider when Dealing with Commercial Hard Money Lenders

Commercial hard money lenders offer hard money loans to commercial property investors. These lenders are still lending money to borrowers even after the recession which hit most economic sectors across the world. Today, there are many hard money lenders with loans that you should consider when looking for a hard money lender to get your commercial establishment or investment loan from.

Short term loan

Typically, a commercial hard money loan refers to a short term loan. It commonly has a one year term although you can negotiate for the extension of the term. Some hard money lenders can offer commercial loans of up to three years. This is due to the fact that hard money lenders are also trying to lend more money so that they can realize more profits.

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Consider prepayment penalties and exit fees

This is very important factor to consider when getting a commercial hard money loan. An exit fee is usually a major fee that most hard money lenders will charge you when you pay off the loan before the term end. Some lenders will charge you this fee even if you pay off the loan early, late or on time. Additionally, be careful about the late fees that some lenders charge for balloon payment. With more than 70 percent of hard money loans being paid off late, lenders do everything possible to track the charges for balloon payments which are made late. This can be even ten points with some commercial hard money lenders. It is important that you consider such fees and payments when getting your commercial hard money loan so that you can apply for a loan that you can pay off comfortably.


Speed is very important in investment. You have to get financing quickly so that you can buy a commercial property before another investor buys it. Many commercial lenders of hard money win businesses on the basis of their speed. A hard money loan deal can be closed with ten days or less. This is what makes hard money loans a preference for most property investors. Therefore, look for a lender that will take the shortest time possible to process your commercial hard money loan so that you can purchase the commercial property that you are eyeing before another investor takes it.

Value added deals

There are lenders of commercial hard money like Houston hard money lenders who specialize in the value added deals. These are deals in which developers purchase existing properties after which they improve them using the loans that they get from hard money lenders. For instance, a developer can purchase a raw land then up-zone the property. A developer can also purchase an empty retail center after which they upgrade it before installing new improvements for tenants. After improving the property, a developer can sell it or even refinance it in order to get out the profit.

Generally, there are many things that you need to consider when dealing with a commercial lender of hard money. Take your time to consider all the dynamics of commercial hard money lenders and their loans before you proceed to sign for your commercial hard money loan.

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Tips for Identifying the Best Hard Money Lender Houston Service

Enlisting the best hard money lender Houston service can make all the difference in your investment. To most real estate investors, hard money lenders are the best option when it comes to getting property financing. This is mainly due to the impact of the worldwide financial crisis which has greatly affected the real estate sector. If you need money to invest in real estate within a short period, you do not have to depend on local banks. Choosing the best hard money lender is one of the best alternatives to getting financing from local banks. However, with the high number of hard money lenders in Houston, choosing the best lender can be overwhelming. Nevertheless, when you have tips to guide you the process can be easier.

Choose an established lender

Hard money refers to money that is provided as a loan for the acquisition of a property by a finance channel which can be a bank or an individual. Hard money lenders refer to a group of people or private individuals who offer short term loans for such investments. It is important that you deal with an established lender in order to establish their credibility and reputation with ease. This will also enable you to get a loan with the best interest rate.

Consider interest rates

This is perhaps one of the major determinants for the choice of a hard money lender.  Hard money loans have to be repaid within months or even days. As such, their interest rates are very high ranging from 12 percent to 17 percent annually. These rates are usually determined by the deal type. It is important that you consider the interest rates before you choose the hard money lender Houston service to enlist.

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Fast service

The major reason why most investors opt for hard money loans is due to the fast approval process. You might also be getting a hard money loan because you do not have good credit score or time that is required to get a loan from a bank. Perhaps, you need a hard money loan because if you wait for a loan from the bank you might find the property already gone. Therefore, look for a hard money lender that will process your application quickly and give you the money that you need to seal an investment deal.

Conduct some research

Perhaps, this is among the best ways of finding the best hard money lender in Houston. Take your time to learn more about the hard money lender that you are thinking about. For how long has the lender been in business? Does the lender offer traditional lending too? Is there a physical office for the lender that you can visit? Answers to such questions should enable you to establish confidence in a hard money lender.

Ask other property investors

If you know some property investors, ask them about a hard money lender that you might be considering. A good hard money lender has an established network with property investors because they usually get financing from them.

Generally, there are many ways of identifying the best hard money lender Houston service. Simply take your time to consider different lenders in Houston so that you can choose the best among them.

Everything You Wanted to Know about Hard Money Lending

Hard money lending involves a hard money lender and a borrower. A hard money lender can be an individual or a company. Usually, the hard money lender offers short term loans to businesses or individuals who need quick cash or capital. Usually, borrowers use the hard money loans in acquiring investment properties at a relatively faster rate. Lenders are usually considered as private lenders. Conventional standards are not used when extending credit to borrowers. Hard money loans are used as short-term, temporary solutions till conventional financing is acquired.

Identification for this type of lending

Traditional loans from banks and other lending institutions entail the evaluation of the creditworthiness of the borrower on the basis of their credit or debt history as well as income. With this lending, lenders depend mostly on the property value in determining the suitable lending standards. Since acquiring hard money loans is typically easier than acquiring traditional financing, hard money loans are considerably costly.


Loans from hard money lenders are an ideal option for investors who want to acquire properties quickly or those who cannot be financed by traditional institutions like banks. Additionally, individuals whose credit is impaired yet they urgently need money and they are willing to pay the high borrowing cost can also get these loans. If you are trying to avoid a foreclosure, you can also get this loan. In most case, while trying to avoid a foreclosure you have most probably turned your financial situation around yet you are still in need of money to stop a foreclosure or to get time for selling your property. As a foreclosure borrower, you typically need a minimum of between 30 and 40 percent equity in your property to qualify.


In hard money lending, lenders are usually private lenders. They have different sources of money. Some of them lend money to other people just like the conventional lenders. Small lenders usually use individual money which they lend investors or borrowers who are denied financing by traditional lenders. However, borrowers pay the loan with interest which is usually very high. There are also lenders who take the lending responsibilities. These find borrowers who need financing and are ready to pay with certain interest rates.


The cost of borrowing hard money is usually higher than that of traditional loans. The interest rate ranges between 12 and 18 percent. This is because the basis of the interest rate is the high default risks involved. Some of the factors that determine the interest rate include how risky the borrower is considered by the lender, the current debt and asset amount. These loans also have closing costs which are usually between 2 and 10 points.


Typically, hard money lenders lend an average of 65% of the value of the property after repair. The loan must be in first lien position. As such, when borrowing money so that you can stop a foreclosure, you should borrow adequate money so that you can pay off your original lender. Hard money lending basically entails the provision and borrowing of short-term loans whose term is usually between two and three years.

Everything You Wanted to Know about Hard Money Lenders Houston TX Loans and Services

Many businesses and institutions enlist hard money lenders Houston TX services when traditional lenders such as banks turn them away. Hard money refers to the money that private lenders supply which is not the case for banks. This money is given this name since a real asset which might be a property is used to secure this money. Getting loans from Houston TX hard money lenders is usually easier than getting loans from banks. However, the overall cost of these loans is bigger and their risk is also bigger for the borrowers. Nevertheless, many individuals and startup businesses prefer them to bank loans due to the stringent application and approval processes set by banks and other traditional lenders.

Who generally benefits from the loans offered by hard money lenders in Texas?

Although anybody can get a loan from a Texas hard money lender, investors in real estate who do not qualify or dislike dealing with the traditional banks’ requirements benefit from these loans the most. Although the rates that are charged by banks for their loans are much lower, they have more stringent criteria. A borrower must be evaluated by a bank, which is usually the first or primary qualification. With Texas hard money lenders, only an investment property is evaluated and this is their primary qualification. This makes the process of applying and having the loan approved faster. The process requires less documentation. Beyond the evaluation of an investment property, hard money lenders use after-repaired value in evaluating the loan. This factor is usually considered by very few banks.

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Why people and businesses get loans from Houston hard money lenders

One of the most compelling factor that make many people and businesses get loans from hard money lenders is the speed with which their loans are approved. The application and approval process for these loans is very simple. No tax returns are required or statements of personal finances. All these are major requirements for bank loans. Although loans from hard money lenders are expensive, they are easily available and with few restrictions or questions. If you want to close an excellent deal quickly but you do not have the required money, a reputable hard money lender can be your perfect solution. Investors with several outstanding loans also benefit from hard money lenders Houston TX services.

The approval criteria

Most loans from hard money lenders are based on assets. As such, the main focus of hard money lenders is on the property value. The lenders conduct some research in order to determine the value of the property in the market. This enables them to establish what they can lend the borrower. Typically, borrowers are given about 70 percent of the property’s after-repaired value. However, there are other factors that Houston TX hard money lenders consider including location, rental income and investor experience.

Generally, many people and startup businesses have ventured into lucrative investments by borrowing loans from hard money lenders.  If you are having difficulties in getting money to finance your investment or to close an excellent deal, you might as well consider getting hard money lenders Houston TX loans.