How do you go about handling hard money loan rates? This process is vital if you want to ensure you and your clients are receiving the best deal possible — from interest rates to processing times, every little factor is essential in creating the most reliable experience possible. Knowing which kinds of loans to offer and to whom will go a long way in ensuring nobody’s time is wasted in the long-term, not when homes, businesses and livelihoods are on the table. Below is a simple list on hard money loan rates and hard money lenders, from how they work to the unique traits they bring to the table in these changing times.
How Is The Loan Market Looking?
The United States is seeing a lot of ups and downs in recent years. Thanks to economic changes and recent reforms, many Americans are seeking out additional options to aid their business, education and overall livelihood. The latest statistics from the Federal Reserve have indicated a significant amount of consumer debt building across the country, with May of 2015 seeing a total of almost $3 trillion. Additionally, general debt has seen a noticeable increase and isn’t expected to slow down any time soon. This reality has caused more brokers and investors to seek out hard money loan rates.
What Are Hard Money Loan Rates?
Let’s start off with the basics. Hard money offers higher interest rates and lower loan to value ratios, considered perfect for people with specific long-term goals in mind. Hard money interest rates can start at anywhere from 15% to 18%, even higher in some cases. The majority of hard money loans are secured by properties with anywhere from 30% to 50% equity, so the investor is considered well-protected.
Who Applies For Loans?
A wide variety of people apply for loans at any given time, from students to homeowners. Since most people buy their homes with either a 15-year or 30-year mortgage, home prices have increased as a result and influenced the rate of home equity people have to contend with over the years — the median amount for homeowners under the age of 35 tends to be around $20,000. Student borrowing (as well as the amount of students enrolled in either a university or community college) has been increasing steadily over the past few decades.
How Does A Hard Money Loan Work?
Hard money loan rates can sometimes be the more preferable option, depending on the situation. A typical bank loan borrower that wants to take out a business loan needs to have been in at least two years of business, with a minimum of $250,000 in annual revenue. Additional requirements are good personal and business credit with positive cash flow. Hard money deals are often sought after for their quick turnaround and accessibility, generally offered after a mere one to two week processing period.
Where Do I Start?
More and more Americans are seeking out loans to make their goals become a reality, whether it’s helping them achieve their business goals, saving up for a home or buying a car they need. Hard money loan rates are considered incredibly helpful for their quick turnaround time, flexible interest rates and accessibility to a wide variety of different goals. Duration and payment periods for private loans are generally shorter compared to traditional loans, which can go anywhere from a year to 20 years — private loans can only be granted with duration of five years or less. Keeping these factors in mind will help when distributing loans to brokers and investors. With hard money loans, anything is possible.