How does Merchants Mortgage compare to “hard money” lenders?
Some hard money lenders may be willing to lend 100% of the purchase price of the property if the property is being purchased significantly below market value; whereas at Merchants Mortgage we do require a downpayment a/k/a “some skin the game” so to speak. We have historically found that requiring downpayment reduces the likelihood of delinquency or foreclosure as we are a lender and do not wish to be a property owner via foreclosure. Also, our rates and fees tend to be much less than those of a hard money lender. We are often around 9.5% on rate and 1.5% on fee whereas many hard money lenders are at 14% on rate and 4% on fee. But, it depends on the investor and their qualifications and the particular property as to what type of financing will be best suited to them.
