Commercial Real Estate Market

Beware Of Rates That Are Too Good To Be True

Hard Money Rates

In our last blog – “Tips On How To Choose A Hard Money Lender”, we touched on money lenders who are promoting low interest rates and to be wary of these lenders.  In this blog, we are going to go a little more in-depth on this topic.

Hard Money Loans are for real estate investors who either don’t have a great credit score and/or need money fast and don’t want to go through the red tape that a traditional lender would need to qualify them for a loan.  Because of these parameters, the Hard Money Lender is going to charge higher interest rates.  The typical interest rate on a hard money loan is 8%-14%.  If a lender is promoting rates starting at 5.99% rate, then you will be finding yourself having to qualify for the rate with a strong credit score and other qualifying factors of a traditional lender.

Even though their advertisement isn’t “false” it is a technique to get you in the door and sell you on a loan with higher rates and terms.

Hard money borrowers secure their loans through the equity in their property rather than creditworthiness.  That’s why these types of loans are also referred to as equity-based or asset-based loans.  Instead of having to submit financial documents and go through weeks, and perhaps even months, of credit checks and other steps, the borrower just needs the equity in their property in order to qualify for the loan.

H&O Capital Funding is an experienced hard money lender with several years of success and we provide borrowers with quick turnarounds.  Our team is here to help answer any questions, contact us today to see if we’re the right lender for your real estate investment needs.


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