Hard money loans are collateral-based real estate loans made by private investors instead of traditional mortgage lenders, banks, or savings and loans . The hard money loans fill a void for funding when banks won't lend for any reason, there are credit problems, or there is little time to qualify for conventional financing to secure a purchase or get money from the equity in a property. These types of loans are sometimes referred to by different names than hard money loans often referred to as private money loans, private equity loans, or bridge loans.

We recommend the use of hard money loans to purchase real estate, with a down payment of 25% or more. you can secure a new first mortgage. To refinance a loan use hard money loans to obtain cash from equity, pay off a mortgage or balloon mortgage, refinance a loan in delinquency, or to prevent a foreclosure, pay off a Chapter 13 bankruptcy, and various other reasons.

Donel and Associates advises that you will need at least 25% or more residual equity left in the property after the new loan, including points and fees, to qualify. You can also use a hard money loan to secure a bridge loan to for the purchase of new real estate prior to selling your current property.

Note: The amount of required equity for hard money loans varies by property type and investor. Should you wish to explore thee various options available with hard money loans we recommend that you consult with an experienced legal professional who has a past track record in advising clients on hard money loans. Contact Us Today For The Legal Advice You Need!