Frequently Asked Questions

What is a 'hard money' loan?

A 'hard money' loan, also known as a 'private money' loan, 'equity-based' loan, or 'asset- based' loan is based primarily on real estate collateral. Private lenders fund the loans rather than institutions such as banks.

What is the most common use for hard money?
Our most common loans are first mortgages used for purchases or cash-out refinances on non-owner occupied properties. We recommend that you take the time to understand when hard money is an appropriate option and which borrowers benefit from the use of hard money. 

How much equity can I get?

We consider lending up to 60% of the property value. Our 60% maximum does not mean we lend 60% in every situation, or on all property types. 

How do I prove income?

If you are employed, we can take a paycheck stub showing year-to-date income.

If you are self-employed, we accept financial statements, bank statements, tax returns, etc.

If you are on fixed income, such as social security or disability, we will require the yearly award letter.

Do you make hard money loans based on the appraised value or the purchase price?

We prefer to use the most conservative value. Sufficient equity is necessary to make the transaction work.

What about prepayment charges?

In many cases lenders will protect their interests by attaching prepayment charges to the initial period of a mortgage. The charges are also known as "prepayment penalties." Our loans are written to conform to the Department of Corporations of California statutes and all applicable Federal statutes.

Prepayment penalty terms are disclosed in the Note and the Mortgage Loan Disclosure statement. Prepayment penalties are negotiable with the lender. In some situations, a penalty can be waived by accepting a higher interest rate or paying extra points.

Do I need to pay for anything up front?

We do not require any fees up front. Our fees are taken out of the loan proceeds upon close of escrow. Occasionally, the borrower may need to pay an appraisal fee up front when an outside appraisal is needed. Such fee would be paid directly to the appraiser.

Who orders the appraisal?

We handle our own appraisals. Usually, we do an in-house appraisal when the property is typical for the neighborhood and sales comps are available. If this is not the case, we will order an appraisal with an independent licensed appraiser. In today's market, we look very closely at the value and the value trends. We do not recommend that borrowers order their own appraisal. Private lenders, like conventional lenders, give less credibility to appraisals ordered by the borrowers.

Are lending charges higher for hard money loans?

Private lender money loans are more expensive. Our rates and fees are NOT competitive with banks, government, or other conventional lenders. If you qualify for a loan from one of these sources, we recommend staying away from private lenders and hard money loans. The only exception is if you need money fast or you need short term money for a profitable investment project. 

Do you report to the credit agencies?

No. We do not report payment history or any loan information to any credit agency.

What happens if I can't afford to make the monthly mortgage payments?

Mortgage payments should always be the top priority. If you are unable to pay all the bills, you should consider making the mortgage payment first. The more equity the property has the more you stand to lose through foreclosure. Also, late fees, collection costs, and foreclosure fees are chargeable to the mortgage account. These fees can add up quickly, compound financial difficulties, and hurt the ability to catch up after falling behind.

How long is the loan process?

When you submit a loan to us, it typically takes 7 - 10 days from start to finish. You will receive a same day pre-approval, and final approval in 24 hours. If you need funds faster because of an impending emergency situation, we can cut the process down depending on title conditions.

Will you pull my credit report when I apply?

No. Credit is not necessary for us to make a loan decision. We don't pull you credit until after we know we are making a loan for you, and not without your permission.

How do I get started?

The starting point is to apply online by submitting a request for a Same Day Pre-Approval.

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