A hard money lender typically charges a few points in addition to interest on the loan. The points may vary between 1-4 typically and are paid at closing. For example, 1 point on a $500,000 loan is equal to $5000. These points are usually paid at settlement as part of the borrower’s closing costs. Hard money interest rates are typically in the 7-10% range depending on the complexity of the loan, the borrowers down payment, the location and the loan term.

In many cases, a hard money loan is given similar weight as cash buyers because of the speed of which hard money loans close.

Hard money loans make sense in many situations. You cannot compare a bank loan to a hard money loan. For starters, they are typically interest-only payments. Also, hard money loans are typically meant as bridge financing. Most hard money loans are made for 12-24 months. They are meant as a short term solution while the borrower secures long term financing or completed their business objective. Hard money loans are a good fit for wealthy investors who need to get funding for an investment property quickly, without any of the red tape that goes along with bank financing.

A hard money loan is simply a short-term loan secured by real estate. Unlike traditional lending institutions, hard money lenders are mainly concerned with the equity in the property and the location as opposed to a borrower’s credit score and financials. A major benefit of securing a hard money is the ability to close a hard money loan quickly. Most hard money loans take about five to seven days. Los Angeles hard money lender Universal Commercial Capital can typically fund hard money loans in about five to ten days on average.

After receiving a signed term sheet, Universal Commercial Capital typically funds a loan in five to ten business days, depending on the complexity of the loan.

Hard money lenders like Universal Commercial Capital primarily focus on a property’s equity to secure the loan. The borrower’s credit is considered but is not a primary determinant in the underwriting process.

A hard money loan is a real estate-backed loan where a borrower receives funds secured by the equity in their property (or properties). Hard money lenders like Universal Commercial Capital are mainly focused on the equity in the property as opposed to the borrower’s financials or credit score. Hard money loans are typically short-term ranging from six months up to two years.

The majority of hard money lenders DO require a down payment. They’ll take a look at your credit score, experience, and maybe a few other factors. The lower the LTV, the stronger the deal and you may get more favorable terms. Down payments for hard money loans typically range from 20% to 40%. Universal Commercial Capital will also cross collateralize other properties owned by the borrower with equity if available.

Hard money loans typically won’t report credit. They may check your credit before lending, but it is not common to report the hard money loan to credit bureaus. Hard money lender’s lend against the asset and not your credit.