Category Archives: Home Mortgage
Hard money lenders explained
I recently attended a real estate investment seminar in Las Vegas. Between speeches by different gurus I would mingle with other investors and explain that I owned a hard money brokerage firm. Even though it has been around for almost a hundred years now, I was amazed how hard money lenders still seem to be mysterious to many investors. They either did not understand how the hard money lending industry worked or had heard that it was something they should avoid like the plague.
To put it simply, hard money loans are short term loans that are used for various real estate projects. The most common projects are house flipping, but they are also used in commercial construction and land development. Essentially, a hard money loan is often the best choice for money that is needed on a short term basis.
Unlike conventional financing, a hard money loan also known as a private loan originates from a private individual or institution unlike a bank. The loans are generally short term between 6 and 12 months and have a high, interest only payment generally between 10% and 14%
Another major difference between a hard money loan and a conventional loan is that a hard money loan is not based on a persons credit but instead on the value of the project after its completion. A good example is if John has a house that he wishes to rehab and sell for $100,000.00 a hard money lender will lend up to $65,000.00. This is what is known as Loan to Value or LTV. Most hard money lenders lend anywhere from 55% to 70% LTV depending upon what type of project the borrower has.
Now you are probably asking yourself what the catch is, how do these lenders make there money? Hard money lenders make there money 3 different ways. The first way they make there money is the closing costs. These are anywhere from 1 to 4 percentage points of the overall loan. These points are paid when the loan is completely paid off in full. The second way they make there money is the interest only monthly payments on the loan which is anywhere from 10% to 14%. The third way they make there money is if the borrower happens to default on the loan. Being as the loan is not based on the persons credit, hard money loans are secured by the property itself. If a borrower defaults, the hard money lender now has a property or piece of land for 65% of what it is worth. However, it should be stated that this rarely occurs as most hard money lenders are not in the business of foreclosing on properties.
So should a borrower use a hard money lender? The simple answer is if a borrower has a real estate project that needs short term financing that a conventional bank will not lend on, yes.
Gateway Funding Diversified Mortgage Services And Other Financial Institutions Hit One Out Of The Pa
(1888PressRelease)Gateway Funding Diversified Mortgage Services was thrilled to participate in the charity event and plans on doing so for years to come. “It was a great day filled with fun and camaraderie and an excellent way to give back to our community” said a Gateway Funding participant. Gateway Funding believes strongly in philanthropy and does so in a variety of ways
Horsham, PA;On Saturday September 18, 2010, Gateway Funding Diversified Mortgage Services and seven other area financial institutions competed in the 22nd annual Bankers Baseball Bash for Charity which raised $ 9,000 for needs in our community.
This year’s beneficiaries were Erica Mundt, a 3-year old with acute lymphoblastic leukemia; Sarah Batalka, a 29 year-old with mitochondrial, a rare form of muscular dystrophy; and The Pride of Quakertown, a Non- Profit organization that is dedicated to giving back to the community by bringing together the residents of Quakertown and its surrounding communities in the playful, fun environment of sports and leisure activities. The tournament is a Round Robin event, culminating with a championship game. More than 150 people participated this year, including employees and family members of employees.
The competing financial institutions included: First Niagara, First Savings Bank, Gateway Funding Diversified Mortgage Services, Harleysville Savings Bank, Merck Sharp & Dohme Federal Credit Union, Meridian Bank, Quakertown National Bank, and Univest. This year’s hard fought championship game was won by Harleysville Savings Bank who received a trophy and the bragging rights for one year.
The Bankers Baseball Bash took place from 8:30 a.m. to 7 p.m. at B. Earl Druckenmiller Complex in Sellersville. The Bankers’ Baseball Bash Committee has been in place for more than 20 years and has raised more than $ 160,000 for charities. According to a local newspaper, a committee decides on which area individuals are most deserving of the monetary awards. In order to raise money, each competing team pays an entry fee, raffle tickets are sold and donations are solicited from locals who wish to sponsor the event.
Gateway Funding Diversified Mortgage Services was thrilled to participate in the charity event and plans on doing so for years to come. “It was a great day filled with fun and camaraderie and an excellent way to give back to our community” said a Gateway Funding participant. Gateway Funding believes strongly in philanthropy and does so in a variety of ways.
About Gateway Funding Diversified Mortgage Services, LP
Gateway Funding Diversified Mortgage Services, L.P., established in 1994, is a full service mortgage banking firm offering a diverse product line and unparalleled customer service. Our knowledgeable and seasoned Account Executives and Operations Staff are committed to helping our clients meet the needs of their customers. We recognize the challenges our clients and borrowers face today. We are determined to find the best possible solution for our customer’s current financial needs.
For more information please contact:
Keith Godburn
Marketing Director/Graphic Designer
Gateway Funding Diversified Mortgage Services, L.P.
300 Welsh Road, Building 5
Horsham, PA 19044
215-591-0222
kgodburn ( @ ) gateway-funding dot com
Blog Site:
http://www.gatewayfundingblog.com
Also, visit http://www.gateway-funding.com for getting more detailed information
Source:
http://www.1888pressrelease.com/gateway-funding/diversified-mortgage/gateway-funding-diversified-mortgage-services-and-other-fina-pr-246503.html