Florida Hard Money Hard money can serve many purposes in today's market that other sources can't or won't

Hard money loans in Florida and Nationwide are filling a huge hole in the mortgage market left by the subprime meltdown. Most conforming lenders today have so many restrictions that they are putting more and more borrowers outside of that conforming box every day. Due to the meltdown in the mortgage industry there is now virtually no ALT-A or submprime lending being done.

FHA, USDA, VA, and other programs have picked up some of the slack but each of these programs also serves are very narrow market. They are all for owner occupied full document borrowers with credit situations that can be fully explained and documented. So what about borrowers with good credit that can't verify their income? What about investors with more than four financed properties? What about borrowers with bad credit but lots of equity they need to tap into? The markets have no real answers for those situations... enter florida hard money loans.

Florida Hard Money

LTV - Hard money lenders don't have quite as many restrictions as the rest of the industry. For the most part equity is king. As long as a borrower has equity in their home they can still get cash that most other conforming lenders can't or won't provide to them. While most hard money lenders claim to go up to 65% of the appraised value... it is our experience that they really want to do 50%-60% maximum loan to value on their loans. This is because in Florida we have a declining market and they want to make sure that if they have to take back the house for any reason they can still sell it quickly and recover their funds.

Liens position - In Florida almost all hard money lenders want to hold a first lien position on their loans. It is difficult and time consuming to have to foreclose on someone that walks away form their home and from a 2nd lien positions it is nearly impossible for them to recover their losses on the home.

Rates - Hard money lender programs can vary greatly. Some lenders only do short time 1-5 year loans. Others will do 30 year fixed loans. We find that rates range from 10%-16% depending on the other terms of the loan such as prepayment penalties and length of loan in years. The average loan we see  is 12% on a 30 year fixed loan with a one year prepayment penalty.

Underwriting - Hard money lender underwrite loan differently that conventional lenders. Conventional lenders are primarily concerned with payment history and ability to repay loans. Hard money lenders on the other hand are looking to make sure that the value of the property is true. They also want to make sure there are no liens on the property and that nothing major on your credit can be placed as a lien on the property either. This is why a hard money lender may still ask for a credit report. They are not looking at credit scores so much as if there are any tax liens or types of judgements that may endanger their first lien positions.

Fees - Hard money lenders in Floridaand all over the country charge points to use their money. In addition to the 1-2 mortgage broker points, the lender themselves charge 1-4 points as well.

Benefits of Florida Hard Money Loans

The biggest benefit is of course the liberalness of the underwriting. This means they don't care if it's an investment property, how many properties you have financed, how late you are on your mortgages, if you have a bankruptcy, or if you can't verify your income. An added benefit to their streamlined underwriting is that it doesn't take long to get your loan closed. Most loans close in 3-7 business days. The title work and the appraisal are the two main things that we are waiting for in most cases to get a hard money loan closed.

Having access to hard money funds can be invaluable in a great many situations. Investors and primary home owners alike seem to be turning more and more to hard money as a solution while the big banks try to figure out what they are doing with their business.

We are dedicated to offering all options to our clients and have many relationships with local private investors and established hard money lenders in Florida and around the country.