subject: Requirements When Applying For Hard Money Loans [print this page] Hard money loans are loans offered by hard money lenders. In some ways, they are the same as conventional commercial loans although they do not have stringent processes like banks and other traditional banking institutions. Hard money loans are based on the asset offered as collateral. Because of this, hard money lenders become less concerned with credit reports or monthly income. Instead, their main concern falls on the property itself. With hard money loans, the loan amount does not exceed more than 50 to 60% of the property value. An independent appraiser determines the value of the property. Appraisal is usually dated within six months of the loan approval. In this article, we will share with you some important requirements which you may want to keep in mind before applying for a hard money loan:
Executive summary The executive summary is very important when applying for hard money loans. The borrower should complete a form, which lists down all his related experience, updated resume, colored pictures of his property and other information which can convince the lender why your property makes a worthy investment.
Title report Another very important requirement of hard money loans is the title report. It is very important that borrowers have a clean title record. Hard money lenders will make sure that you current title of the property can be properly documented. This may be confirmed by securing a title report from local title companies. The price of reports varies some may be obtained for as low as $500 while others for as high as $2000. A report may be issued in about a week.
Evidence of the insurance Hard money lenders usually requires their borrowers to maintain insurance on the property. The borrower should be able to borrow the amount specified by the lender. In cases where the borrower runs a business out of the commercial property by which the loan is placed, the lender may require additional coverage.
New construction loans If the borrower requests a loan for a property, which is still under construction, they might have to supply the lender with additional construction documents city and local permits, contractor bonding, architectural drawings, environmental reports, licensing information and the like.
Before you apply for a loan, make sure that you ask hard money lenders for a complete list of their requirements. Take time to put together all the necessary documents before you apply to save you time and effort. For more tips on hard money lenders and real estate investment, go to www.REIWired.com.
