Hard Money Loans

Hard money loans are loans where the real estate serves as the collateral asset.

The lender assumes a lien position on the property with either a trust deed or deed of trust and if the borrower cannot make the agreed upon payments the lender may foreclose on the property and sell it to repay the underlying debt on the property.

It is called a "Hard Money" loan not because it is made in hard currency but because the terms of the loan are hard on borrowers if they cannot make the payments.

Interest rates are higher than on a normal house usually between 3-5% per month and often much higher. LTV (loan to value) ratios are lower (as low as 60%) because these loans are not insured by the government unlike most bank loans.

These loans are most often temporary or bridge loans. Commonly they are used by investors and others seeking fast money (in as little as 24 hours) without the credit or hassle of a bank loan. People in foreclosure with enough equity may get one of these loans while they get on their feet (this very risky and only should be used as a last resort.

Always make sure you know the terms of your loan. Most Hard Money Loans are short term lasting only 30-120 days. Interest is usually due at the end or the loan but accrues right from the beginning with heavy penalties for going over the time allowed.

We provide Discounted or "soft" Hard Money loans on a limited basis and have a large referral network of Hard Money Lenders that loan from a few thousand to 10 million dollars.

If you are looking for Hard Money contact us by phone or email and if your property doesn't qualify, we will refer you to an associated lender who may have different standards. There are also lenders on our links page as well.

Or feel free to use our links directory and select a Hard Money Lender for yourself.

Foreclosure Bailout Loans

A foreclosure bailout mortgage is very similar to a Hard Money loan in that the main requirement is equity in the property.

Commonly the banks or lender will require at least 35-50% of the current value of the home in equity (50-75% loan to value).

That means if you have a property that is worth $200,000 a lender will loan up to 60-75% of that value to you. Most commonly these loans require at least 60% in equity in order to make use of the loan.

The bank or lender is lending with an assumption that you have a high probability of default and that they will be foreclosing themselves. They build in their protection or profit with your home equity.

In most markets only a small percentage of people in foreclosure actually qualify for these loans, maybe as little as 10%.

These loans are not common and even with the prevalence of bank foreclosure most loan officers and mortgage brokers are unfamiliar with bailout loans (or have never actually done one).

When looking for a loan of this type ask "what programs do you have for people in foreclosure and how many have you done?" This is very important, the clock is ticking and you don't want to waste time and lose your house to foreclosure because your loan officer or lender didn't know what they were doing or were inexperienced.

Our affiliated mortgage company has done many difficult loans like this and will be happy to look at your situation and give you an answer within as little as 24-48 hours.

For quick professional service contact our lending company at bailout@homechamps.com