Hard money lending is a good way to get money when you can’t find any other type of loan… but is it the right kind of lending for you? If you need money fast, but you don’t have great credit or you can’t get financing from a more traditional lender, this may be the right choice for you. Here we’re going to talk about what hard money lenders are and what they’re not, so you can make the best choice for you. Let’s get started and see what hard money lending is all about!
What is a Hard Money Lender?
A hard money lender is just a lending company that gives out a special type of loan backed by your property. So if you’re going to buy a house while you’re selling one, you can get a hard money loan, also known as a bridge loan, to get enough money to cover a property. They’ll hold a certain amount of equity on your house until you pay off what you’ve borrowed. This is known as collateral.
What Kind of Collateral is Acceptable with Hard Money Lending?
You’ll want to speak with your Toronto mortgage broker (like us!) to find out how this works. For the most part this means you’re going to be using the property you take a loan out on to get the loan. So if you’re buying a property and getting a hard money loan, they will use that property as collateral. If you’re getting a bridge mortgage (another kind of hard money lending) they will use the house that is on the market as the collateral.
Is it Risky?
Hard money loans can be risky if you don’t know what you’re doing. This is why it’s so important to have the right people working on your side to make sure you’re getting the most out of your loan. You’ll want to speak with one of our Toronto mortgage brokers to find the right hard money lender for your needs. There are many different types and some will not be a suitable fit for what you need. Some will only offer money on commercial properties for example, while others will only lend money to people with excellent credit. There are caps on how much interest they can charge (these are generally known as usury laws) to prevent price gouging.
How to Find a Hard Money Lender
Finding a hard money lender is as easy as finding a local Toronto mortgage broker. We’ll help you find the right lender for your circumstances. No two borrowers are alike and no two lenders are either! We’ll help you find the right lender and avoid the wrong ones. We’ll show you comparisons from different lenders who want to work with you and help you choose the right one for your needs. Why settle for a low interest rate when you can get the best terms and the lowest interest rate? Let us help you today!