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Hard Money and Foreclosures: What You Need to Know

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Life can come at you fast. Let’s say you have been faithfully repaying your mortgage for years. Suddenly, however,  you are out of work and unable to make the monthly payments. This setback may seem like just a little blip on the radar, but it could be the start of a dramatic downward financial spiral which inevitably may lead to foreclosure. Should you find yourself in this situation, however, there are ways out. This handy guide will show you all you need to know about hard money and foreclosures.

The Foreclosure ProcessPrivate loans foreclosure

The foreclosure process can begin as early as your first missed payment. Typically, after the first missed payment the lender may file a lis pendens – a written notice that a lawsuit has been filed.  After the third missed payment, the lender may begin the foreclosure process unless the owner repays the loan in full. If this payment is not received, the property may eventually be auctioned off by the lender to the highest bidder. Often, property owners will try and sell before they are foreclosed upon, but this could result in a substantial loss.

Hard Money Can Help 

Should you find yourself facing the threat of foreclosure, a hard money loan may be the answer to your problems. However, what exactly is “hard money?” Simply put, hard money loans are short-term loans secured with real estate as collateral. Offered through private lenders, using hard money to avoid foreclosure is an excellent way to obtain the funds you need to save your property.

Foreclosure bailout loans utilizing hard money are typically interest-only payable monthly, or in some cases, amortized with a large balloon payment due at the end of the loan term. The lending amount available depends on property value, typically based on an appraisal and also a broker’s opinion of value.

e around the supposedly sky-high interest rates of hard money loans. While interest on these loans is indeed higher than a typical long-term conventional loan, rates are much lower than the 18 percent horror stories often mentioned. In fact, hard money loans tend to be around 12 percent, and even better—the rates at Lionshare Lending typically range between 7-12 percent.

Common Misconceptions About Hard Money and Foreclosures

The many myths of hard money loans paint them in a negative light. The most prevalent of these myths revolve around the supposedly sky-high interest rates of hard money loans. While interest on these loans is indeed higher than a typical long-term conventional loan, rates are much lower than the 18 percent horror stories often mentioned. In fact, hard money loans tend to be around 12 percent, and even better—the rates at Lionshare Lending typically range between 7-12 percent.

The other prevalent myth about hard money loans is that the initial property valuations are shockingly low. This is indeed not the case with reputable lenders, where several metrics are used to determine the value of the property to be used as collateral, not least of which is an independent valuation conducted by a third party.

If you find yourself under the threat of foreclosure, Lionshare Lending is here to help. We offer the quickest loans in the industry, and with over 40 years’ experience, we have the knowledge to get you the funds you need fast. We offer unrivaled customer service, as well as excellent interest rates, flexible loan terms, and a loan-to-value ratio of up to 75 percent. So if you need a hard money loan between $150,000 and $100 million, contact us today at 1 (423) 388-2660.

 

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