Hard Money Loans

Asset-Based Financing with Private Money Loans

When less-than-pristine credit standing or time constraint are obstacles to obtaining traditional commercial or residential financing investment, a private “hard” money loan may just be the answer. Unlike traditional commercial lending options, private money loan approvals are heavily based on the value of the property being financed rather than on an individual or group’s creditworthiness. These unique, asset-based loans aren’t suited for everyone, but they are a great option for clients in certain circumstances that we’ll discuss. Our mortgage professionals at M1 Capital Corp have the private lending power and experience to connect you with the right private money financing for your commercial or residential venture. Contact us to learn more about private money loans in New York, Westchester, Dutchess, Bronx and Rockland Counties.

A Non-Traditional Lending Solution

Private money loans were first originated in the U.S. in the 1950s when the credit industry underwent a modern evolution. They are a type of asset-based property financing. They are available for residential and commercial property and commonly for investment properties. The residence or commercial property are used to secure the loan, rather than a borrower or borrower’s creditworthiness. If a borrower defaults on the loan, the property may be seized to settle the debt.

Private money loans are only available through private lenders and not through big banks. They are not formally regulated by most state and federal laws, which means lenders have more flexibility regarding which borrowers they approve. It also means that private lenders undertake higher risk than with some other types of mortgage, so there are some specifics to consider.

Private Money Loan Considerations

Private money mortgages have higher interest rates than traditional mortgage loans because they are higher risk. Because of this high-interest rate, most private money loans have short terms, sometimes just months or a few years.

The loan-to-value ratio (LTV) for this type of financing typically does not exceed 65% (that is, at least 35% equity is required). We will set up a property appraisal to determine the value of the property and determine how much can be approved.

Private Money Loan Eligibility

Common borrowers for private money loans include:

  • Real Estate Developers
  • House flippers
  • Contractors
  • Real estate investors
  • Others with cash on hand but may have poor credit, such as those who have previously undergone foreclosure in the past

Don’t Miss Out on an Opportunity

When the right residential or commercial property comes along, you don’t want to miss it. If creditworthiness is a problem, private money loans can be the right solution for some. The M1 Capital Corp mortgage professionals have the experience you’re looking for when it comes to a serious investment. We help finance clients in New York, Westchester, Dutchess, Bronx and Rockland Counties. When you’re ready to take the first step, contact us.