What is a Hard Money Loan?
Hard money (also known as a rehab loan or bridge loan) is the term used for loans funded by private parties who want a safe and high return. The Norris Group is a broker who arranges loans for and sells notes to private investors. We work directly with property buying investors who use these funds to purchase properties with the intent to fix and sell them for a profit in a very short period of time. Real estate investors use hard money when they are unable to or do not have time to obtain financing from more conventional sources. There are many types of hard money loans. The Norris Group specializes in purchase money first trust deeds to investors who purchase homes at a substantial discount. The Norris Group will do loans on units. Construction loans will be considered based on the individual deal and existing market conditions. The Norris Group does not do owner occupied or commercial loans.
A hard money loan is a specific type of asset-based financing in which a borrower obtains loan funds based on the value of a parcel of commercial real estate securing the hard money loan. Hard money loans are typically issued at higher interest rates than conventional commercial mortgages and are almost never originated by a commercial bank or other deposit institution (see discussion below). Hard money loans are similar to bridge loans and usually demonstrate similar underwriting criteria and cost of funds characteristics. However, while a bridge loan refers to a commercial real estate property or investment property that may be in transition and not yet qualified for traditional financing, a hard money loan takes the status of the loan characteristics one step further in that it most often refers to not only a loan with a higher interest rate secured by a commercial mortgage but also a borrower with a distressed financial situation, such as arrears on the existing commercial mortgage
Today real estate market is rapidly evolving. Often, traditional lenders are too bogged down with red tape and stringent loan requirements to provide the necessary flexible financing solutions. At HardMoneyLoanNYC, we recognize the importance of finding creative solutions to non-conforming opportunities in an expedited manner.
we are servicing the five boroughs of new york city. Manhattan,Brooklyn,Queens,Bronx and Staten Island.
- The idea is simple:
- To close the loans that other lenders won’t…
- To close them in timeframes that other lenders can’t even consider…
- To close them with a flexibility no one else can deliver
Hard money loans are loan arrangements that involve backing the amount of the loan with real estate that is owned by the borrower. With a hard money loan, the lender does not take into consideration the current creditworthy status of the borrower. As long as the property that is used to secure the loan is enough to cover the balance and any rates of interest involved in the transaction, the lender is assured of being able to recoup any losses incurred by the default. The hard money loan is not an uncommon phenomenon. Companies may choose to utilize this type of loan format in order to secure needed capital in a short period of time. Since all that is required is proof of ownership of the property that is used as collateral, the turnaround time on obtaining this type of loan is very short. At times, a hard money loan may be used as a stop gap measure to fund necessary projects while a long-term loan arrangement is worked out. Individuals may also qualify for a hard money loan. Often, ba
Hard money, or private money, is exactly that: non-institutional money that can be borrowed, usually from an individual or an extremely small lending company. They are an alternative to a bank or traditional mortgage lender, and their loans are typically much different. • Hard money lenders are expensive. They typically charge interest rates in the teens, and charge at least 2-3 points and sometimes as many as 7-8. Clearly, this is not a loan for Joe Homeowner. • They typically lend for very short terms. This could be anywhere from a few months to a few years, but seldom longer. • They lend at extremely low loan-to-value ratios (LTVs), meaning that they will only lend a small fraction of the value of a property. If the real estate appraises for $100,000, they might only lend $60,000. Advantages of hard money loans With all of that being the case, why would anyone use them? There are several advantages, offsetting all of those disadvantages. To begin with, they are much faster to act th
