Hard Money Loans – Lenders and Brokers
Wednesday, November 01, 2006
A hard money loan funds a potentially viable project for which financing may be unavailable from conventional sources. As you might imagine, the risks involved are greater, and so are the interest rates.
Hard money loans can be used for a wide variety of purposes -- bridge financing, debt consolidation, acquiring property, commercial deals and many other purposes. Lending decisions and loan disbursement are normally quick, and collateral is required.
Normally, the practice is to advance around 65% of the value of the security offered. The standard practice of Kennedy Funding, the nation’s largest direct private lender of hard money and bridge loans, is somewhat different. Kennedy Funding will normally fund up to 75% LTV. In some cases, Kennedy will grant higher amounts. And typically, applications for amounts in a certain range, usually $1 million to $100 million, are considered. In some special cases, Kennedy Funding will fund loan amounts above $100 million.
Some lenders won’t advance money on the collateral of properties on which the borrower or his close relatives are living. Lenders often consider bad credit and high-risk applicants who may find it difficult to borrow elsewhere.
In the hard money field, the major players are lenders and brokers. As a borrower, you can approach either group. A broker’s job is to put the potential client in touch with interested lenders, and offer advice on the best deals. Quotes from three or four possible lenders are typically presented to the borrower.
Of course, there is likely to be a fee for the services. If the lender is approached directly, there would be some savings, but most borrowers may not know whom to approach, or how to deal effectively if they do.
You may or may not have to offer a payment up front, as some lenders will process a loan application without an advance. The annual interest amount is divided by twelve to arrive at the monthly installment.
When all is said and done, hard money funding caters to a real need. Kennedy Funding ranks at the top of the hard money funding assemblage.
Hard money loans can be used for a wide variety of purposes -- bridge financing, debt consolidation, acquiring property, commercial deals and many other purposes. Lending decisions and loan disbursement are normally quick, and collateral is required.
Normally, the practice is to advance around 65% of the value of the security offered. The standard practice of Kennedy Funding, the nation’s largest direct private lender of hard money and bridge loans, is somewhat different. Kennedy Funding will normally fund up to 75% LTV. In some cases, Kennedy will grant higher amounts. And typically, applications for amounts in a certain range, usually $1 million to $100 million, are considered. In some special cases, Kennedy Funding will fund loan amounts above $100 million.
Some lenders won’t advance money on the collateral of properties on which the borrower or his close relatives are living. Lenders often consider bad credit and high-risk applicants who may find it difficult to borrow elsewhere.
In the hard money field, the major players are lenders and brokers. As a borrower, you can approach either group. A broker’s job is to put the potential client in touch with interested lenders, and offer advice on the best deals. Quotes from three or four possible lenders are typically presented to the borrower.
Of course, there is likely to be a fee for the services. If the lender is approached directly, there would be some savings, but most borrowers may not know whom to approach, or how to deal effectively if they do.
You may or may not have to offer a payment up front, as some lenders will process a loan application without an advance. The annual interest amount is divided by twelve to arrive at the monthly installment.
When all is said and done, hard money funding caters to a real need. Kennedy Funding ranks at the top of the hard money funding assemblage.
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