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Hard Funds Real Estate Lenders Pluck Up The Financial Pieces Of Our Cracked Economy.
California bridge lenders such as Mager Capital prove to be a very effective choice for financing in today's disturbed market. With the existence of conforming money at an all time low, hard money loans are becoming ever so dominant amongst the general public. For decades, hard money was used principally for investors who needed fast cash to realize a substantial increase on a real estate deal or for those borrowers who had credit issues, thus not allowing them from qualifying conventionally. Not anymore! Hard money has now migrated to the front line of the real estate area.
Hard money lending has been around for almost a century, but has never been in such great desire as we are currently experiencing in today's economy. For decades hard money rates were 12% to 20%, but due to healthy capitalized portfolio lenders leaping into the market, we have witnessed a decrease in rates & fees. Many lenders noticed that there was a void between conventional and old hard money rates where we presently see numerous private lenders positioning themselves. With the recently founded competition we find rates starting at 8.5%, which was unheard of in previous years.
Unfortunately, we have encountered that with nearly all portfolio lenders, there is a prominent disparity between the desired loan amount and the loan total offered by the lender. If a greater loan to value is a requirement we propose using investor pools such as Mager Capital. Their rates start at the same low 8.5% comparable to some portfolio lenders, but rise with risk and loan to value. With a properly executed pool of investors, a lender has the capability to utilize investors with a more aggressive hunger for a higher return and thus allows for a greater loan to value when desired. The interest rate gain is minimal and you basically have two types of lenders under one roof instead of getting a "Take it or leave it", low ball offer.
We know that identifying a "well rounded" hard money lender can prove to be confusing and that is why we are providing this recommendation. We hope this article has been beneficial and look for more in the near future.
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