All About Hard Money Loans in Brief

What are hard money loans?

Hard money loans are loans that are funded by private investors instead of the traditional banks. They are also often referred to as private money loans. Such loans are provided on the basis of the value of property rather than the credit score or financial history of a borrower. Typically the loan amount is determined by the loan-to-value ratio (LTV) which means the loan amount is divided by the value of the property which is to be used as a security. Although California hard money loans are easier and faster to obtain compared to the more traditional bank loans, the borrower still has to go through an underwriting process and qualify for specific terms.

Why to consider a hard money loan?

Various scenarios may provide reasons for borrowers to opt for hard money loans instead of the conventional loans from the banks.  A few are as follows –

• When you have a property investment deal in hand but you do not have ample time to go through a lengthy bank loan process.
• When you do not have a credit score that meets the requirements of banks or other conventional lender requirements
• When you do not have enough cash, your cash is not seasoned, or you do not have access to private sponsoring from family or friends
• When you want to fix and flip properties and need faster access to financing
• When you do not have the required capital for covering the rehab costs of the property you are looking to flip

In all the above scenarios where traditional lenders and banks cannot help you hard money lenders in California like All California Lending can step in and potentially help.

What are the requirements for a hard money loan?

As already mentioned, California hard money loans are offered on the basis of the value of property that serves as a security. However, the terms depend upon the hard money lenders in California you choose to work with and your unique circumstances. But there are typical requirements such as the value or purchase price of the property, your experience judged by the number of homes you have flipped in the past, the type of property i.e. condo or family units and property documentation that includes the scope of work and insurance.

How hard money loans work?

Just like any other traditional loan, hard money loans for real estate go through an underwriting process. However, this process is simpler and faster than that of the conventional loan processes. As the lender has interest in the value of the property more than your finances the approval of loan takes just a few days. Once your loan is approved and you have submitted the property information the hard money lender may ask for an appraisal on it. If the property meets up the criteria set by your lender and you have the documentation and insurance on the property your deal will be finalized and you will get the money to purchase the property.

Conclusion:

All California Lending are specialized hard money lenders in California.  California hard money loans and other commercial loans are all they do. Give them a call for swift funding.