The term “hard money loans” refers to a style of lending by some private investors. Hard money loans are usually lent against hard or tangible assets such as residential homes, commercial building or condominiums. They use the hard asset as collateral to secure the loan. This can result in a lower level of risk to the investor and a lower cost of borrowing.
Hard money lenders will look at your entire financial situation to determine if you are able to qualify for a loan. The amount of equity in your home could be a significant factor in determining the loan amount. The hard money loans have grown due the restrictive lending practices that most banks adhere to. Today hard money loans are fairly common. There are government regulations that must be followed and all transactions are finalized by a lawyer.
Here are examples of circumstances that lenders will consider when they are trying to determine if you qualify for a loan.
1- You were recently laid off from your job and presently have no income. Hard money loans are based on your assets, but the fact that you will be able to get a job will work in your favor.
2- Home renovations may have cost more than you anticipated and you need the money to complete the work. Hard money lenders can base on the loan on the value of the completed property.
3- You may be retired and would like to give your children some money. People may find that many of the Canadian banks will not lend to people who are retired. Our private hard money loans can assist you in getting the money that you need.
4- You may be in a “power of sale” situation and you need to stop the proceedings before you lose all the equity that you have built up in your home. The property which is up for a power of sale may have a significant amount of equity and the amount you owe the bank is small.
5- You have to take time off work due to a recent illness in your family, during this time you missed some payments, which resulted in a lower credit score. You are now back at work but need a loan to consolidate your debt; hard money loans may be a good option for you.
6- You are selling your home, but need a bridge loan to cover you until you receive the money from the sale of your property. A short term bridge loan can provide you the funds required to complete the sale of your home. This is a complicated transaction, but our mortgage brokers are trained to arrange these transactions.
7- You would like to consolidate some personal loans into one loan. These hard money loans can cover wedding costs or emergency home renovations. A personal debt consolidation loan can be arranged by using the equity in your home as security. The additional security allow hard money loans to give you a lower rate of interest than your creditors presently charge.