Hard money loans are a type of loan based on certain assets. In this type of loan, the borrower receives funds guaranteed by the value of a piece of real estate. This loan is paid back with a higher interest rate than commercial property loans or conventional housing. This type of loan is rare, if ever, is issued by commercial banks or other deposit institutions.
Hard money mortgages in Los Angeles are very similar to bridge loans. Bridge loans usually have similar criteria for loans. They also have costs similar to the borrower. The main difference between commercial loans of hard money and bridge loans is that bridge loans often refer to commercial property or investment property in the transition.
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The property may not be fully eligible for traditional financing. Commercial loans of hard money refer not only for asset-based loans with high interest rates but also loans for financial situations that might be depressed. It also includes cases where someone is in arrears on the existing mortgage or where the bankruptcy and confiscation trial has been in the process.
Hard mortgage, both commercial and housing, made by private investors. They usually make loans only in their area. The credit score of the borrower is not important because the loan is guaranteed by the value of collateral property. The loan ratio to the maximum value is 65-70%.
Commercial hard lenders are usually a strong financial institution with deposits and the ability to make discretionary decisions on loans that are not appropriate. This borrower is not in accordance with Fannie Mae's standards, Freddie Mac, or other rescue credit guidelines.