Re: What is a hard money lender? - Posted by Ed Garcia
Posted by Ed Garcia on July 14, 2002 at 14:21:14:
Hard Money Loan.
A loan that is underwritten with the condition and value of the property as the
primary criteria for approval. Secondary issues may include the credit of the borrower, the ability of the borrower to repay the loan and/or the ability of the borrower to manage the property or successfully complete a rehab and sell the property. Owner occupancy, debt ratios and other issues are seldom a factor. Appraisals rather than purchase prices are used to determine value. Cash out purchases are often allowed and are another key benefit. These loans are usually approved within days and are often funded in two weeks or under with times as short as two or three days not uncommon. The cost for the benefits
of speed of funding, lax underwriting and other advantages is typically a moderately high interest rate (usually low to mid teens) and high points (usually 5 to 10).
This is the definition given in Glossary Of Common Terms Used In Loan And Lending By Ed Wachsman.
You’ll find this in the How- to- Articles of this site. I would like to recommend you visit this area of The site because it is very informative.
The bottom line on Hard Money Loans, is that they are loans made, based on the equity of property. Your income, credit, or any other criteria is not the major consideration.