Without prior knowledge from anywhere concrete by the real estate or finance industries, the topic of hard money lending might be a bit surprising. What are hard money loans and soft money loans?
Obtaining a hard money loan is easier and comes with flexible terms compared to soft money loans. Indeed, soft money, on the other hand, is much more restrictive, and its terms are very particular and rigid. Most hard money originates from private investors instead of your average lending institution. In addition to the initial loan, when calculating the interest rate, closing costs are also considered. Similarly, it is quite a common practice for investors to propose as collateral other real estate properties to secure a bigger loan, a transaction acknowledged as “cross-collateralization.”
Here are some other facts you should consider before deciding on a hard money loan:
- It becomes an option when traditional mortgage financing is impossible owing to low credit, inability to provide supporting documents, closing timeframe, and the property’s condition.
- As a borrower, be confident you can repay your loan as at when due.
To know more facts about hard money lending, click here.
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