Wednesday, November 30, 2011

Hard Money Lenders: Some things you should know

Hard money lending in California is just as popular as it is in most other areas, particularly with property buyers. You might wonder why credit seekers would likely decide on private hard money lenders over traditional loan associations. You may often hear or read that private funders demand extra or that they are known to be a last option for funding.

The truth is that California hard money lenders offer many services that the banks cannot or will not. They approve more loans, in a timelier manner. They understand the needs of the investor, since most of them have invested in real estate. Many of them still do. Some of them are even considered specialists, a good choice for the rehabber or reseller. The fees that they charge are reasonable, for the most part, but to get the best deal, you should shop around.

You see, some states have regulations in place that protect consumers from unreasonable interest rates and penalties. There are a number of laws that affect the practice of hard money lending in California, but there is no cap on the interest they can charge; no maximum limit on fees. Once you start shopping, you will see that there is a wide range of charges. As with most other things, the easiest way to compare is online.

You will find that California hard money lenders are competitive. They want your business, so they advertise. One of the best ways to choose a provider is to simply evaluate their website. Look for the ones that detail their approval process, repayment plans and additional services. The more up-front they are about what they have to offer, the more likely it is that you have found a reliable legitimate source of funds.

You probably want to avoid anyone that charges an early repayment penalty. If you are reselling houses, your goal is to get the repairs done and find a buyer quickly. You lose money when a house is sitting empty. If you are doing rehab projects, you should look for a California hard money lender that specializes in rehab funding. They can provide funds for purchasing, closing costs and repairs, if the loan to value ratio is right.

Finally, you do not need to limit yourself to hard money lending in California, specifically. For many years, most private financiers only operated in small regions, so that they could drive to the property if they wanted and take a look around. Today, there are great companies that make loans nationwide.Check them out. They might be the best choice for financing your future projects.