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Hard Money Loans Santa Monica
Santa Monica Hard Money Lenders
Delancey Street is a premier, and trustworthy, hard money lender. We fund hard money loans nationwide, and can help you get the financial assistance you need with your next residential, or commercial, property. We understand that many traditional lenders are probably rejecting your request – we’re here to help. We fund hard money loans fast. If we can’t help you – we’ll refer you to someone who can.
Finding a loan via a traditional lender can be a real pain, especially if you have a very poor credit history. With a very low credit score, it could take you weeks or months to be approved for mortgage. It doesn’t matter how urgent your need is – you’ll still have to wait. Hard money lenders, on the other hand, think about the collateral you are giving up as opposed to your ability to pay the loan back. If you neglect to pay back the hard money lent to you, the lender can seize the collateral and sell it to regain their initial investment.
Hard money is are most suitable and valuable to investors who want to renovate or improve a property property prior to selling it at a higher cost. Real estate investors generate an ROI and repay the borrowed cash within a short period of time. Hard money loans, like any other financial instrument, have their advantages and disadvantages.
How fast it takes to get funding
Santa Monica Hard money lenders aren’t worried about your credit rating. Hard money lenders are only concerned about the asset and will process your loan quickly if your collateral justifies the loan. It is important to note that hard money lenders are not always interested in taking possession of your property. They are fast because they spend less time checking your income, bank statement, along with other details. They only care about the potential value of your property. This is important to remember, because if the assessment of the property doesn’t justify the loan – then the lender won’t give you the loan. If you intend on selling the property after acquiring it, then the Santa Monica hard money lender will want to know the after repair value as well.
Unlike the traditional loans, hard money loans agreements and provisions are flexible. Rather than dealing with a large corporation, you will be talking to an individual who is prepared to assist you, and sculpt the loan to your individual needs.
When it comes to hard money loans, the lender is more concentrated about your collateral. Typically, hard money lenders will give you a loan up to a % value of the property. For example, it’s common for hard money lenders to offer a loan up to 60-70% of the value of the property. In the event you have other financial assets to place as collateral, the lender will also consider their value before approving the loan. Most lenders do not even look at your credit rating.
In terms of loan-to-value ratios, hard money lenders keep them to the minimum, with the maximum being between 50 and 70 percent. They do this to give themselves a better chance of getting their money back if they are forced to liquidate your property.
You can apply and get a hard money loan in a matter of days. This is great, especially for borrowers who need a loan – fast. Hard money lenders don’t run credit checks, and don’t have stringent guidelines unlike traditional lenders.
Unlike the conventional loans that require longer to be paid, hard money loans are a a short term term lending instrument. This means that you will need to pay back the loan in the shortest period possible – otherwise, you risk the lender taking your property. If you do not meet this requirement, the lending institution will take the property and sell it to try and get back his/her money.
In contrast to the traditional loans, hard money loans are more expensive. In addition to the loan origination, you’ll also pay closing and servicing expenses. If you take a hard money loan a loan, it may cost you 10 percent more than it might have on the standard loans. Obviously, hard money loans are much convenient.
The rate of interest for repaying the hard money loan can be high because the lenders are taking a risk by giving you the loan. The interest rates usually range between 9 and 14 percent.
Requirement of Equity
Before giving you a hard money loan, lenders ask that you provide a down payment of around 25-30 percent. This is supposed to function as an incentive to motivate you to stick to the agreement. It reduces the exposure the hard money lender has. For example, if market conditions deteriorate – the lender is still protected.
If you are sure you need a hard money loan, we encourage you to contact us. We work fast, and try to give you an immediate answer on whether or not we’re interested in funding your request.
Delancey Street is a trusted, reputable, and transparent Hard Money Lender. We understand that many real estate investors need loans for residential and commercial projects. Delancey Street is a hard money lender that services that state of California, and believes in creative financing. Hard money lenders are individual investors, not retail banking institutions. They are people just like you. They have money to lend.
Because they are private lenders, they are free to set their own lending criteria. Rather than basing their lending decisions on rigid criteria, like credit scores and income ratios, hard lenders base their decisions on the deal. If the numbers for your project work, you get the loan. This means that you wont be held back by your credit profile!
Often, traditional banks try to keep their customers in a box. If a loan request doesn’t fit an exact criteria, they reject it. They do this because they approve loans based on formulas and guidelines. As you know, one side doesn’t fit all.
When you need money for a fix and flip, traditional lenders are often unhelpful. They hesitate to give loans based on the value of the property after the repairs are completed. They base loans on the present state of the property, and on the credit worthiness of the borrower.
For example, a traditional lender may be willing to provide a loan at 90 percent LTV. They use the current, before-repair value; therefore, if the property value is $100,000, they are willing to lend just $90,000. Unless you have a large amount of cash on hand, securing a loan through a retail lender does nothing to help you get the project done.
How hard money lenders can help
Hard money lenders use the after repaired value (ARV), instead of the traditional lender’s LTV standard. ARV differs from LTV because it allows the loan amount to be based on what the value of the property will be once work is completed. This means the money needed for a construction project can be included in the loan proceeds.
For example, a home’s current value may be $100,000. After the rehab work is complete, the value will rise to $150,000. This is the after repaired value. A private money lender will then be able to give a loan of 80 percent of $150,000, or $120,000. This provides the money needed to complete the repair or rehab.
Hard money loans provide short-term financing to get projects done. Once the project is completed, the borrower can then refinance the property into a conventional mortgage. Hard money loans are designed to be used for periods of 6 months to a few years.
The payments for hard money loans remain affordable despite their short terms because they are paid as a balloon payment. With a hard money loan, the borrower typically makes no monthly payments. In some cases, the borrower may be asked to make a payment solely on the interest. Then, the remaining balance comes due.
What to do if you need a loan
If you need a loan for a residential or commercial property – we can help. Delancey Street understands that getting a loan fast, can be the difference between winning – and losing – a potential investment property. Many of our team members are real estate investors themselves. Regardless of what your goal is, we are here to help. You begin the process by contacting us, and telling us about your project. Tell us how we can help, and what your goals are.
What we look for
Delancey Street cares about one thing exclusively: whether your project will succeed or not. Contrary to traditional lenders, we don’t care about your credit score. We care about how much money you need, how you’ll use it, and ultimately – how you’ll repay the loan in a set period of time. Once we get these answers, we can comfortably determine whether or not your loan makes sense.