Hard Asset Money Loans

This article is going to discuss what is a hard asset money loan, what are the requirements of obtaining one and finally some of the particulars of getting one funded

A hard asset money loan borrower receives money in exchange for giving up an asset base loan on a particular piece of real estate. The money received usually is short term anywhere between six months to two years. Additionally, the loan to value ratios usually run anywhere from 65-70% of the property value. The lender fees generally run anywhere between 4-10 points. The interest rates on this property usually run between 13-18%.

Your credit score is sometimes a factor in the decision making of the lender, however the main criteria is the value of the property and it's underlying equity. The long intentions of the borrower are examined as a factor into the credit score criteria. Flipping a property vs refinancing the property at some later date is important information for the lender.

Hard money lenders usually don't lend on farm operations, mobile and residential homes. Hard asset money can be done quickly, appraisals can be as simple as a drive by vs a full blown appraisal. A Party near a foreclosure may want to consider this as an option before this event occurs,( Time can be of the essence )

Each lender has his own rules on prepayment penalties, so the borrower should be aware of all the fine print. Tax liens, judgments etc will be paid off as part of the closing of a hard asset money loan.

There are many lenders out there to do a hard money loan so please check out all the variables before commencing this type of asset based loan. The spread between points and interest rate can be substantial therefore shopping for the best deal is important.

The following are some of the eligible properties that would qualify for a conventional/ hard asset money loan:

Partial List of Eligible Properties

Apartment Buildings Medical ( Hospitals, Clinics)
Auto Malls Mini Warehouses
Automotive( gas stations) Mixed Use Projects
Bed & Breadfast Office Buildings
Churches Office- All Types
Gas Stations Office - High Rise
Golf Courses Office- Medical
Health Care- Hospital Restaurants
Hotels/ Motels Retail Strip Mall
Industrial Buildings Self Storage
Leisure ( Marinas, RV Parks) Subdivisons

Thanks.......J.M Luna