Commercial Hard Money
THE BIG PICTURE
Circumstances sometimes lend themselves to require non-traditional commercial lending sources that are commonly known as Hard Money Lenders.
Hard Money Lenders cover a spectrum of financing on investment property. There are Lenders that specialize; such as those that finance golf courses, marinas, or churches. There are others that focus on multi-family units and apartment complexes. Many consider hospitality and special purpose buildings.
Some of these Lenders are wealthy private individuals but most are institutions that represent conglomerates like pension and retirement funds. Some lenders finance small loan requests while others can fund upwards of $100,000,000.
As your mortgage broker representative, VisionMortgage Company, Ltd. can lead you to through the wide array of choices keeping your budget and financial goals in mind. We work with the most reliable funding sources in the nation.
WHY HARD MONEY?
Hard Money allows many the opportunity to finance transactions that are turned down by traditional banks and the Small Business Administration lenders. Hard Money Lenders concern themselves more with the collateral value of the property (the appraised value) than the actually qualifications of the individual or corporate borrower.
For this reason, tax returns and financial statements are never required—the loan is in fact a STATED INCOME transaction. Credit history is not necessarily a concern either. A credit report is required only in that the Lender checks to insure that the borrower can enter into the transaction without the threat of IRS issues or legal problems. There is no focus on FICO credit scores.
THE REST OF THE STORY
Hard Money allows many the opportunity to finance transactions that are turned down by traditional banks and the Small Business Administration lenders. Hard Money Lenders concern themselves more with the collateral value of the property (the appraised value) than the actually qualifications of the individual or corporate borrower.
For this reason, tax returns and financial statements are never required—the loan is in fact a STATED INCOME transaction. Credit history is not necessarily a concern either. A credit report is required only in that the Lender checks to insure that the borrower can enter into the transaction without the threat of IRS issues or legal problems. There is no focus on FICO credit scores.
So How Do We Get Started?
The first step is to create a brief “executive summary”, i.e. tell us the story about your project ( it can be emailed/faxed to us). These are some of the essentials:
- Tell us where your property is located. If you can, send a copy of the taxing authority summary sheet available from the applicable taxing authority.
- Tell us what you think the property is worth if it were on the market today.
- How much money do you need? What is the intended loan amount?
- Who holds title to the property?
- If rental property, we will need a copy of the lease. Is it available?
- The borrower(s) must complete a simple residential loan application. It does not have to be in minute detail but it does require a signature so you must print the PDF file.
» Make sure to complete and sign the checklist. This is our authorization to pull credit. All this can be faxed or emailed back.
» Credit card information or a check is needed for the initial credit pull and the BPO. We discuss the parameters of your loan needs, and maybe even determine the approximate value of your property but we can not move beyond that point without the basis for the entire loan, the BPO.
We are anxious to be of service, so call Armando today – 210-348-0077.
Non-Owner Occupied Investment Properties:
| Payment Based On: | Rate (Annual) | Origination Fee | Prepay (based on original loan amount) | |
| 12 Month Balloon | Interest Only | 12.000% | 3% | NONE |
| 60 Month Balloon | 10, 15, or 20 Year Amortization | 11.5 -12.5% | 2 – 3% | NONE |
**Lower rates available with different point/prepay structure
Other Standard Fees (may vary):
| 2% | Referral Fee to Broker Vision Mortgage Company, Ltd ($1500 minimum) |
$250 – $500 | Broker’s Price Opinion (BPO) of value (varies by property type)* |
$300 – $450 (actual) | Attorney fee to draw our docs |
$375 – $500 | Processing Fee |
$400 | Underwriting Fee |
$125 | Lender Inspection Fee |
Actual | Pre-paid Interest, escrow for taxes, insurance… |
Plus all 3rd Party Fees | (Title policy / fees, recording fees, survey…etc). |
* Note that a BPO is strictly the Hard Money Lender’s opinion of value. It is based on a 90-120 sales price; i.e. at what price would this property sell for if it had to be sold in 90-120 days. It is not representative of true market value—but will be relied upon by the Lender as a basis for their loan.
All loans must close in an entity name (Inc. , LLC, LTD.)—no individual names allowed.