Hard Money Loans

  1. Home
  2. Hard Money Loans

California Direct Hard Money Lenders

RTI Bridge Loans is one of the most experienced hard money lenders in California serving Los Angeles and Orange County, providing loans to real estate investors and property owners who wouldn’t typically qualify for traditional bank loans. Hard money loans are types of loans that are secured by real property – generally, the last resort method used in real estate transactions. Hard money loans are not banks; they are private companies and people. In California, the market for hard money loans is incredibly high and considered the most active and largest residential real estate market in the U.S. – it’s also one of the most valuable real estate markets in the country. Keep reading to learn about hard money loan and hard money lenders, how they work, and how one might benefit you.

Click Here to Request Loan Info

Hard Money Loans Page Contents:

How Hard Money Loans Work

Now that you know essentially what hard money loans are let’s take a deeper look at how they work and what you should expect when borrowing one. First off, the credit-worthiness of the borrower doesn’t have much to do with lending options. So, if your credit isn’t all there, don’t worry. The terms of a hard money loan are normally based on the value of the property utilized as collateral. Often sought after by property flippers who are wanting to resell and renovate the collateral (real estate property), hard money loans were made to be paid off fast – within a year of borrowing usually.

Traditional money lenders like banks don’t do hard money loans, and hard money lenders are often private companies or individuals who enjoy the business and see value in these financial ventures. To put things in very simple terms, hard money loans are short-term borrowings that are secured by real estate, funded by private investors, and made for people who may have bad credit but a lot of equity. The loans usually require an interest-only monthly payment, then a lump-sum balloon payment at the end.

Hard Money Loan Borrowing Requirements

Like previously mentioned, hard money lenders are more concerned with the amount of equity a borrower has invested in a property rather than the borrower’s credit history. Credit is generally overlooked, even foreclosures and short sales tend to be ignored if the borrower has enough capital to pay the hard money loan’s monthly interest. Lenders will also want to know what the borrower plans to do with the property. They will more than likely require a reasonable plan that will show how the borrower ultimately intends to pay off the loan. Usually, this means improving or renovating the property and selling it or receiving long-term financing in the near future.

If you live in Los Angeles or Orange County, search for the great hard money lenders near me and call the professionals at RTI Bridge Loans for more information on what your specific requirements will be to fund your next project.

Why Should You Use A Hard Money Loan?

There are many different reasons why people choose hard money lenders over traditional lenders such as banks. The main reason is how quickly hard money lending is able to fork over the funds. In fact, the hard money loan process usually only takes a week, whereas banks can take up to 45 days. Good luck even hearing about your application for bank funding within a week!

With hard money lenders, the application process usually only takes 1-2 days, and in many cases, the loans are even approved on the same day. This is a hugely significant advantage, and your competition will most likely not have the full funds (like you will have if approved), and they will probably lose the bid.

Another one of the more popular reasons why a borrower may choose hard money lending is because they have been turned down by bank loan lenders. Life happens – bankruptcies, low credit, foreclosures…these are all reasons why a bank will potentially turn down your loan application. Hard money lenders look past these blemishes so long as the loan can be repaid and the borrower has a healthy amount of equity invested in their property.

Hard Money Loan Rates And Points

Points and interest rates will vary depending on the region and the lender. For example, California’s hard money lenders usually have lower rates than other parts of the country because California has a lot of hard money lending firms in every county. Higher competition means lower rates. Interest rates are typically higher than traditional bank loans because hard money lenders are taking a risk when they lend you the money for your new property.

Hard money loan rates usually range from 10-15% depending on which lender you go to. Points typically range from 2-4% of the total loan amount. Both interest rates and points may vary depending on the LTV (loan to value) ratio, which we will talk about next. RTI Bridge Loans serving both Los Angeles and Orange County can help better prepare you for what to expect with interest rates and point information.

Contact Now

Hard Money Loan To Value Ratios (LTV)

This is a term you will often hear, so pay close attention. This is how much money the hard loan lender decides they can give you. The LTV is determined by the ratio of the loan amount divided by the property’s value. Most hard money lenders will lend roughly 60-75% of the property’s current value.

Other lenders will lend based on the ARV (after repair value), which is what the property’s estimated value will be after the borrower has improved or renovated the property. This is a bit riskier because the total amount of the capital put forth by the lender increases while the amount of the borrower’s capital invested in the property decreases. The higher risk will require hard money lenders to charge a higher interest rate.

Fast Hard Money Loans in California – Flexible Funding for Real Estate Investors and Property Developers

California is one of the country’s biggest housing markets with plenty of hard money lenders to choose from. And, these lenders are pretty flexible when it comes to property project types. However, the most popular projects that hard money lenders tend to approve are fix and flips. People who have houses that are in poor condition will usually accept the first offer on the table, and with hard money lending, you can be the first offer on the table. Traditional bank loans simply don’t work for fix and flip projects because they take too long to get approved, and the home or property you’re looking to buy will be sold fast (especially in Los Angeles and Orange County). You can score your own fix and flip property with higher chances when you opt for a hard money lender.

Final Thoughts

The market can be tough in California, especially if you are looking to buy a new property fast. That’s where hard money lenders come into play. They are a legitimate way to get money fast, whether you are simply purchasing a new single-family home or a corporate office space, even commercial real estate.

When you find a good lender, you will be able to determine all the small details we discussed earlier, such as your own personal requirements, interest rates, payment plans, etc. RTI Bridge Loans serves all of Los Angeles and Orange County and is here to help you with any questions you may have about borrowing money from a hard money lender.

Contact Now