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Hard Money Home Loans |
Hard Money Loans for Borrowers with Bad Credit
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Home Loan Wholesale provides opportunities for a hard money home loan for refinancing, purchase and cash out. Even if you have not qualified with other lenders, give us 5 minutes and we may find you the loan you have been searching for. |
A hard money loan is one made by a private investor or other private fund source (a non-prime lender), rather than a traditional financial institution. These loans generally carry high fees and much higher than normal annual percentage rates (APRs) because they carry such a high risk for lenders. Among the reasons anyone would seek these non-conforming, non-prime loans include:
- Having low credit scores (typically credit scores below 500) - typically some who's had a recent bankruptcy, consumer credit counseling, collections, charge-offs, repossessions, judgments, tax liens, notices of default and other derogatory information on credit reports.
- Having a loan (a borrower and/or a property) that falls outside the traditional prime and sub-prime loan underwriting guidelines.
Featured Hard Money Lenders
Home Loan Magician
Quality Home Loans |
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According to Fair Isaac Company, over 75 percent of mortgage lenders and over 90 percent of credit card lenders use credit scores when making their lending decisions. A low credit score may result in a denial of credit. So, if you have bad credit, and your scores are too low for even sub-prime loans, you'll need to find a home equity lender that works with non-prime credit.
The upside is that the qualification process for hard money loans is a lot simpler than that of other loans. The investor/lender reviews the real estate being used as collateral to determine whether it holds sufficient value for the investor/lender to be willing to take the risk of granting the loan. Most hard money lenders require the LTV to be under 70%. The borrower's current financial status and future potential is reviewed to determine the risk. And, because hard money loans are short-term loans of 2-18 months, an exit strategy is reviewed to determine whether the loan will be completed satisfactorily within the allotted timeframe.
Hard money loans are good for foreclosure bailouts, debt consolidation to quickly improve credit scores, paying tax liens and other quick fixes to hard financial problems. But, they are not a good idea for refinancing unless you're refinancing to help you avoid foreclosure. If possible, try to work out your financial issues with your creditors before trying for home refinance loans or home equity debt consolidation loans. Once you get to the point where your scores are high enough for a sub-prime loan (typically 540-619), then secured debt consolidation loans for consolidating revolving debt to pay off credit card debt will lower your payments and save money. You'll have many more options available for using your home equity to save money and get cash out through debt consolidation loans. Fixed rate consolidation will save you more money down the road than adjustable rate mortgages (ARMs).
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