new to hard money lending how do you qualify hard money deals?
Aug 05, 2009
in
Hard Money Loans
I am going after hard money deals and wish to learn how to qualify deals quickly not to waste time, so if you are marketing hard money loans please tell me how to qualify prospects thanks
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3 comments
Crystal Clear on August 5, 2009 at 8:20 am
It is all based on the property as the economy tightens, the hard money lenders are backing up their LTV’s to 60-65%. They usually charge points up front and a high interest rate. The loan is also commonly a short term loan of say 6-12 months.
It is not uncommon for someone to pay 3-8 points on a deal and 13% interest rate.
What that means for you on a $100,000.00 loan you are looking at $3,000-$8,000.00 in origination fees plus your closing costs.
If you want to qualify quickly have all your ducks in a row. Know what the fair market value is. Have proof to back it up, (appraisal, tax bill) outline what you are going to do to the property, how much it will cost and what it will be worth. ( their appraisers judgment will be what they loan on)
Contact one’s you are looking to work with and ask them what they what to see when they are considering loaning on a property. You will know exactly how to put the documents together.
wartz on August 5, 2009 at 8:20 am
You qualify for hard money deals by not being qualified for good loans. A lender has to make sure there is a good equity cushion for when the borrower flakes out.
Steve on August 5, 2009 at 8:20 am
Most hard money lenders are less concerned with credit scores and more concerned with the Loan-to-value (LTV). They will usually loan no higher than 70% LTV or if the property is worth $300k then a hard money loan might get you a maximum of $210K with a high interest rate then average of course.