Traditional banks do not make hard money loans. Hard money lenders are typically private individuals and companies and the approval process is significantly faster and more streamlined than conforming loans. These loans can be approved in as little as a few days versus a month or more for traditional programs. The interest rates tend to be high, sometimes even higher than subprime loans. Also, these are typically not allowed on owner occupied properties because of regulatory oversight and compliance. These type of loans are used for flipping houses, purchasing investment property and purchasing commerical property. The borrower’s financial position is typically not the focus while review is solely on the collateral hence why these loans have significantly lower LTV’s between 50 – 75% versus the typical 80% or more on a conforming loan. I’m Stewart Brown, a licensed Mortgage Loan Originator in Palm Springs, California here to simply topics in Real Estate and Mortgage Lending. Please, like, share, follow and subscribe!
