Money lenders for bad credit ? Are they real? [mortgageinsuranceguide.blogspot.com]
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mortgageinsuranceguide.blogspot.com Money Lenders for bad credit - They do exist!
Quite often, people who are looking for hard money may not have the best credit. That’s not always the case. The majority of people who are looking for any type of hard money or private money financing, are people that need some type of liquidity advance.
This means that they may own some real estate and they need to get some money out of it. They may find a good opportunity and need to close fast and then secure a loan from financing later.
They may have a situation where their business needs some capital, so they need to pull some money out of their property that they may own, free and clear.
There are a lot of different situations but there’s another situation, where people just don’t have best of credit to find a good opportunity.
These could be people that are looking to buy something and resell that as a real estate investor but they can’t do that because they are unable to find money lenders for bad credit.
It could be someone who is looking to purchase it and trying to find long-term financing, where that could be private or whatever the case is.
The concept of hard money or private money basically just means that it is an alternative financing.
Alternative financing means something other than conventional financing that is going to be sold to Wall’s Street or to secondary markets.Alternative financing is becoming more and more popular because of the tightening credit markets and the need for liquidity or the need for capital for businesses or individuals or whatever the case is.
Now, hard money lenders or private money lenders aren’t going to lend, just to a business.
They actually going to lend based upon real estate.That being said, I would like to focus a little bit today on money lenders for bad credit. One of the things that hard money lenders or private money lenders are so well known for is lending based upon the asset of real estate; not necessarily lending based upon the individual. Â
In lots of cases, they are looking more towards the assets than they are looking towards the individuals. That being said, the tangible asset has to be good, which means that the value has to be good on that.
Private money lenders are actually looking at the value of the collateral. So, if you have got something that has a lot of equity in it or it could have a lot of equity in it and you are looking for a private or hard money loans, that’s probably going to work out.
But if you don’t have lot equity or you don’t have any equity at all or it’s really not a good loan to value situation, hard money or private money lender is not willing to do that.
I think it could be rule of thumb with this as you know if you go get a conventional loan, you will have to put 20% down, unless you are getting a government backed FHA loan.
On a traditional conventional loan, if a conventional lender require 20% down or require that you really go through an FHA, where the government is actually ensuring that 20% down to the lender.
Then it is going to be really important for you to realize that a hard money or private money lender is going to ask for more than 20% equity.
That’s just kind of common sense in that because they are doing things based upon the different standards and taking all the risks, so they really want to see that.
So, really your tangible asset has to be solid, meaning there has to be a lot of value in that tangible asset.
The situation you are going to run into is very hard for you to get hard money or private money loans if you have a bad credit or if you have bankruptcy.
If you have had a bankruptcy that has been discharged recently in the last 12 months; you are going to have a hard time in getting financing.
You are also going to have a hard time in finding financing if you are in the middle of bankruptcy because it doesn’t make sense for someone to take that type of risk.
Also, if you have judgments, typically attached to the property, you can run into problem with that as well.
Some hard money or private money lenders will allow you to put the property into an LLC and have you signed it as a personal guarantee and that may work out for you as well. That’s going to depend upon the situation. So, that’s a situational question.
If you have collections, some hard money lenders are going to have you be okay with that, others are going to have problem with that.
If you have any types of tax liens and the government is coming after you because you haven’t been paying them, that’s going to be a problem for many hard money lenders as well.
Again, some of them will allow you to put the property into an LLC as long as you are buying it with the LLC, others won’t. It’s really important that you know that.
At the end of the day, when it comes to getting hard money or private money loans if you have bad credit, it really comes down to having a good deal. So, if you have a good deal, no matter what problems you have, you can probably get a lender that’s going to accept this.
What I mean by that is if you are buying a property, that’s worth for $ 100,000 and you are buying it for $ 10,000, there’s probably a very good chance that even if you have any of these problems, you would be able to find a lender who is going to do that for you.
But if you are buying that property for $ 75,000 with all these problems, you are going to have more difficult time doing that.
It really comes down to how good the deal is. The better the deal, the credit problems can be overlooked because of the quality of the deal and the loan to value on it.
The more loan to value that you are asking for, the more private or hard money lenders is going to be looking towards your stability, your credit, your background and everything else like that.
Although, the overall purpose for hard money lending is the lending based upon the asset. Even though, they are lending based upon the asset, they would be able to lend you more if you have more strength and less if you have less strength.
But obviously as we have talked about, hard money lenders or money lenders for bad credit are going to provide you money even if you don’t have the greatest of credits. It comes down to how great a deal, you are really buying.
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