10 Basic Questions that Hard Money Brokers Get From Investors
• What is the difference of a hard money loan from a bank loan? Answer: Traditional lending options such as bank loans and mortgages rely on credit scores in order to determine a borrower’s ability to pay. Meanwhile, non-conventional financing such as hard money requires collateral in the form of cash or real estate in place of a person’s credit rating. • What does ARV stand for? Answer: ARV is the acronym for after repair value. This term refers to the value of a collateral property when it is in good condition. • How does a property’s ARV affect hard money loans? Answer: A property’s ARV serves as the determining factor for the amount of money to be released in a hard money loan. • How do hard money brokers approve loans? Answer: Brokers usually conduct the loan approval process as follows. First, an investor approaches them about funding a property with collateral and other necessary requirements on hand. Afterwards, the collateral is appraised and inspected within a certain period. The loan approval process usually takes up to two weeks before it is approved. • Can hard money lenders provide repair costs? Answer: Yes. Lenders finance a property according to its ARV. Therefore, investors are able to have enough funding for repairs or renovations. • How do lenders know the value of a real estate property? Answer: Lenders conduct appraisals in order to determine the value of the collateral property. There are two kinds of appraisals done: appraisal of its current condition, and another ARV appraisal. • Does an investor need to have some money as collateral? Answer: Yes and no. There are some lenders who are willing to do 100% financing on a property depending on the deal. Nevertheless, it does not hurt to have some money as collateral. • Do these lenders provide loans for commercial properties? Answer: Yes. Investors can do loan applications for both residential and commercial properties. • Banks do not approve a lot of loan applications because of a bad credit score. Will hard money brokers do the same thing? Answer: No. There is no need to check an investor’s credit score since hard money funding is mostly collateral-based. • Where can I find these brokers? Answer: These loan providers can be found everywhere across the United States. Investors can find one easier through websites such as RehabHardMoney.com where they can find information about these lenders. Disclaimer: Article submitters are solely responsible for the content of their articles. ArtiLib can't be held liable for the contents of the articles. Report Abuse | Browse By Category |
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