Hard Money Loans & Lenders in San Bernardino, CA
Need a hard money loan in San Bernardino? Not so long ago, you needed proof of a good income and a great credit score and history. Thanks to the upsurge in hard money loans through reliable San Bernardino private hard money lenders like California Hard Money Direct, real estate improvement is an option for you even if you have a strike or two against you.
WHY OUR SAN BERNARDINO LENDERS?
Improving and selling properties in San Bernardino is extremely lucrative these days, and it is therefore no surprise that competition is fierce among the companies fighting for all that money. Inevitably, there are unscrupulous parties who engage in sketchy practices, and it’s up to you as a borrower to perform your due diligence to be sure you are not snared into their net. California Hard Money direct is a company that has a proven history of successful lending. Our credentials are beyond reproach, and we are experts at what we do. In most cases, you will receive approval for your hard money loan within minutes at terms you can afford. If the banks have turned you down, we can set you up with the cash you need.
HOW DOES A HARD MONEY LOAN WORK?
Let’s start by stating what a hard money loan is not. It does not come from a traditional lender such as a bank. Weeks and even months of reviewing your credit and income history do not need to go by before you receive word about the loan. Your loan is not long-term, and it is not based on who you are as a borrower. In essence, what we have described is the traditional soft money loan that comes from a bank or credit union.
Instead, hard money loans come from private investors, which can enable you to have flexibility when negotiating the terms of the loan. To see if you are a good candidate, you can fill out a pre-approval form online. If it’s a good fit for you, the lender will ask you for additional details when they contact you. Just as in a traditional loan, your lender will want to be assured that you can and will make your payments.
However, your appraised property value is the collateral the lender uses. Should you default, your property will be handed over to the lender, no questions asked. Because this is considered to be alternative financing and you fall into a higher-risk category as a borrower, the interest rates you pay will be higher. Generally, hard money loans are short-term, ranging anywhere from a year to a maximum of five years in duration. You are expected to submit monthly interest payments, with a large balloon payment on the principal at the end of the loan.
WHY HARD MONEY LOANS ARE THE PREFERRED FINANCING OPTION
Considering the higher interest rate and final balloon payment, you might be asking who would benefit from a hard money loan and why they would choose it over a traditional one. To answer these questions, ask yourself if you relate to any of these scenarios:
• You have a poor or insufficient income history or a low credit score;
• You have been turned down for a loan by a traditional bank, but you have property assets;
• You need cash fast because you want to quickly fix and resell a piece of property, paying back the loan within a year;
• As a real estate investor who is bidding on a hotly contested piece of property, having cash in hand for a quick closing puts you ahead of your competitors.
If you recognize yourself in any of these vignettes, obtaining a hard money loan is probably the best and only viable way to get the fast, reliable money you need.
HOW TO EARN APPROVAL FOR A SAN BERNARDINO HARD MONEY LOAN
Compared to the process of applying for a traditional loan from a credit union or bank, getting approved for a hard money loan is a walk in the park. Most of the lender’s attention will be focused on your collateral property: its current and future value and your plans for it. Nevertheless, you should still be prepared to present document about your personal financial and credit histories. Additional required documentation will usually include the following:
• Title to the property;
• Documentation of the appraised value of the property;
• Estimate of how much it will cost to make repairs and refurbishments;
• Breakdown of the estimated value of the property after you have made improvements;
• Proof of insurance.
SAN BERNARDINO HARD MONEY LENDER FAQs
In most cases, a down payment of at least 20% to 40% is required. The price will depend on the type of property and the location of the property.
Each hard money lender has its own requirements. In order to make a purchase, the main requirement is a substantial down payment of 20% or more, along with an exit strategy. If you will be refinancing a property, it is usually required that the loan-to-value not exceed 65%, as well as an appraisal, and that you have an exit strategy.
Regardless of your credit score, you may be able to qualify for a hard money loan even if you have a bad credit history. A hard money lender is primarily concerned with equity. If you have sufficient equity, the lender is likely to grant you a loan. Lenders may be reluctant to take on the risk of lending money if there is little or no equity in your property.
The concept of hard money has been around for thousands of years. Hard money loans are loans secured by hard assets. It is common for these loans to be used for real estate investments, and they are often secured by tangible assets, such as property, rather than by personal guarantees. When traditional lenders are unwilling or unable to make loans and financial institutions are unwilling to lend money, hard money loans may be a viable option. A hard money lender can help you close your commercial or residential real estate deal quickly, without having to worry about your credit score.
When a property listing requires cash only offers, the listing agent will require a copy of your bank statement as proof that the funds you have are sufficient to close the transaction.
A hard money loan is a type of asset-based financing. The borrower posts physical property as collateral as an exchange for the loan. A short-term bridge loan is similar to this type of transaction and usually involves real estate investments. In addition, these loans are short-term financings, typically lasting up to three years, and are primarily used to provide quick access to cash.
In many cases the property is distressed and in some state of disrepair. As such, conventional lending sources will not offer a loan. The majority of hard loan lenders are private companies or individuals since commercial banks do not provide mortgages on distressed properties.
Although hard money loans are not cash, they are often considered cash equivalents since they differ from traditional loans. Banks will provide you with a mortgage based on the market value of the property (i.e., the purchase price). The value of a hard money loan, however, in some instances is determined by the expected future value of the property after it has been renovated, rather than its current market value.
As an investor, your goal would be to maximize your return. You can achieve this by getting a higher loan amount than you could on a conventional mortgage. Another benefit is that you will be able to obtain the funds faster than a conventional loan.
You can use hard money loans to purchase, renovate, or refinance properties you intend to rent out or continue to live in. For “fix and flippers” who need capital quickly in order to acquire a property and prepare it for the market, hard money loans are often used as a short-term solution.
It is also possible to use hard money loans if you require more funds at closing than your traditional financing will allow. It may occur in a variety of circumstances, such as when you have an extremely short deadline to complete your purchase or when you need to pay for repairs.
Generally, banks are unwilling to lend on properties that require substantial renovations. Hard money loans are also an excellent choice if the seller is looking for a fast closing in a competitive market. Additionally, they may be used effectively to buy out siblings. If you are planning to purchase or refinance a property through a corporation, LLC, or trust, then a hard money loan would be ideal for you.
Yes, as long as the loan ends up as an equity investment in the property or security. Hard money loans can be used to acquire properties that will be rehabbed and sold for a future profit. If you invest in a property for your home, you cannot claim the interest as a tax deduction.
Hard money loans are typically short-term loans. Therefore, the loan will have a payoff date ranging from one year to five years. In most cases, the loan-to-value (LTV) will be higher than that available from a traditional bank.
Hard Money Lenders in San Bernardino
Let your property go to work for you to get you the money you need to improve it. California Hard Money Direct is a reliable San Bernardino hard money lender that you can trust from pre-approval until you submit your last payment.