The usual Loan-To-Value (LTV) ratio on hard money mortgage is
between 50-60% tops!
This means that if you have real estate with a Fair-Market-Value
of $200,000; you can borrow somewhere between $100,000 and
$120,000 against the real estate as a first mortgage, or a second
mortgage. Hard money mortgage rates, and second mortgage rates
are always high: between 14%-24% and there are always points! The
term varies from 1 year to 5 years. The Annual Percentage Rate
APR is usually between 19%-28%!
The LTV on raw land and other non-income producing property is usually 33%. On land development deals the LTV can be higher. Credit rating is not too important in a hard money loan unless the borrower is simply a chronic deadbeat who is always behind on all debt.
Real Estate appraisals are not too important during the first
year of ownership.
All mortgage loan decisions are made based on purchase price.
We have a bad credit mortgage program in which we will not enter the mortgage loan, or second mortgage loan information with any credit bureau! This will allow you to build up your credit rating fast!!
Hard Money does not mean that we supply the money and you supply the brains!
It means you supply real estate as collateral and we supply the mortgage loan, second mortgage, or bad credit mortgage loan!
In all 50 States we have many "Hard Money" no-income verification, no-credit check programs available for commercial real estate of any type and for construction and land developement. Our typical loan in these situations is 40-50% of the value of the real estate. We do not place much emphasis on credit history or ability to make monthly payments! Many Hard Money loans can be structured so that there are no monthly payments. If your hard money deal makes economic sense, and you have plenty of collateral; Let's Talk!
Here's what we don't want to hear:
(These examples are not meant to sound insulting. They are simply mentioned to save us both a lot of time and phone bill expense!)
(1) You bought a parcel of property last week for $10,000. But you got a great deal because you're a genius and the previous owner is an idiot! The property is really worth $38,000,000! And all you want to do is borrow a mere pittance of $400,000 against the property.
(2) You're going to buy a distressed property for $5,000. After you fix it up it will be worth $38,000,000. You want a $400,000 mortgage loan against the anticipated selling price.
(3) You have a chance to buy a "Can't Miss" business. The last 9 people who owned the business went bankrupt because they were all stupid! Now all you need is a $400,000 mortgage loan and in a short period of time the business will be worth $38,000,000!
(4) You have an appraisal in your hand that states that a piece of property is worth $38,000,000. You can buy it for $400,000. You want a $600,000 mortgage loan from us. $400,000 to buy the property and $200,000 for loose change to help with your living expenses until your ship comes in!
A Hard Money mortgage loan does not mean that we will lend you money at a high rate if you do not have equity of your own into the deal. If you have enough equity in your real estate we don't care if you're the Town Drunk or your going to jail in the morning! Chances are; you are going to get a hard money loan!
However, If you have no equity, and no money to put into a deal; you are simply not going to get a hard money mortgage loan. You don't need us, you need Jiminey Cricket, or a partner with some money!
We do not have any 100% finance programs!
