A: Hard money is generally used as a bridge to allow the borrower or property to be brought into compliance with conventional financing guidelines or sold. It is generally a short to medium term solution (1-5 years) and it is used for all types of real estate: commercial, retail, office, industrial, raw land, construction, land development, multi-family, single family homes and manufactured homes.

Q: Why would anyone borrow hard money when banks charge lower interest and less fees?

A: There are many reasons why a borrower would choose to use private or hard money over less expensive institutional financing, but the following will address the most common uses. Speed of funding is the most common reason — banks typically take a minimum of 45 days to fund a residential loan, 60-90 days to fund a commercial loan, and 120 or more days to fund a construction or development loan. Private money, however, is typically funded within two weeks, and can be funded as quickly as 24 hours in certain cases. Another type of project suitable for private money is a property that either lacks cash flow to meet bank requirements or requires physical improvements. Banks will not typically fund a loan secured by a property that requires rehabilitation prior to its use, and thus the borrower will obtain a private money loan to purchase and rehab the property, and then payoff the private money loan with conventional financing. Sometimes a borrower will purchase a commercial property that has no tenants. Banks will not loan on such properties but private money will provide a bridge loan to purchase the property and provide the borrower with time to lease up the property. Once the leases are in place and have been “seasoned” for at least 12 months, a commercial lender will refinance the private money loan with institutional financing. Banks are also prohibited by law from making most types of raw land loans, so private money is practically the exclusive source of financing for raw land. Equity in the subject property or other properties owned by the borrower is another factor. For example, Coppercrest Funding http://www.coppercrestfunding.com loans based on the value of the property and not the purchase price, and is also able to cross-collateralize the loan with other properties, so we sometimes lend 100% of the purchase price.

Q: What are the interest rates?

A: Private money rates generally range from 12 to 14%. The rate is determined by looking at a combination of factors: (a) LTV ratio, (b) strength of borrower, (c) condition/desirability of property, (d) actual cash-in or real equity contributed by borrower.

Q: What fees are involved?

A: Hard Money Lenders charge a loan fee generally equal to 3 to 5% of the gross amount of the loan. There is also charge typical lender fees, such as a document preparation fee, a loan processing fee and an application/inspection fee. There are also third party fees involved, including escrow fees, title insurance fees and account servicing fees. CopperCrest Funding doesn’t not charge hidden junk fees, but some lenders do, so make sure you read the paperwork or have an attorney take a look at it for you.

Q: Can the fees be paid from the proceeds of the loan?

A: Yes, so long as there is enough equity in the project. Most often, all fees other than the application fee are paid from the loan proceeds.

Q: Is there a pre-payment penalty?

A: Generally hard money loans have a 3-6 month minimum interest requirement. For example, with a 6 month minimum interest clause, if the borrower repays the loan in 4 months, there is a penalty of two months interest. If the borrower repays the loan after six months, then there is no pre-payment penalty.

Q: How quickly can a private money loan close?

A: CopperCrest Funding have closed loans the same day when presented with a complete loan package, but we typically take one to two weeks. Since hard money is coming from private sources, and every deal is unique it is important to ask about closing timelines on a case by case basis, and each lender is different.

Q: Is an appraisal required?

A: Typically hard money loans require an appraisal, but if there is not enough time to obtain an appraisal and there are good comparable sales information then the lender can waive the appraisal requirement.

Q: Why do they call it “hard money”?

A: We have heard many explanations, but the most common answer is that the lending is based on “hard” assets as opposed to the borrower’s credit or income.

Hopefully this article answered some of your questions about hard money. If you are in a unique situation whether you have a great one of a kind investment opportunity or are facing a foreclosure because of an unexpected happening, hard money may be the solution for you. Remember, just like with any loan or mortgage, ask a lot of questions and read the paperwork.

Author: Matt Hartley
Article Source: EzineArticles.com
Humorous photo captions

This articles deals with two bold ideas concerning the Palestinian Arab and Israeli conflict. The first  idea about compensations of lands, possessions  and businesses in occupied Palestine as Jews of the Holocaust did?  The second about Palestinians and naturalization in Arab and non Arab host Countries?

 Mental ability to think logically is a gift. Unfortunately, culturally, to deal with Jews and Palestinian Arabs is not equally perceived. Unlike Arabs, Jews as well as European and other advanced nations use these mental abilities  perfectly. Our concern here, is Israeli mentalities to deal intelligently with the occupation and their management skills inside and outside Israel to handle occupation and politically secure Palestine as a home land.  

To begin with, it  is a remarkable case, Jews used it perfectly and intelligently. They used their mental abilities to support  the idea which made  Holocaust victims paid for compensation of their homes, businesses, lives, and possessions in Germany, while Arab Palestinians were suppressed to do the same locally, regionally, and internationally. 

In the case of TWA incident years back, Libya paid about two billions for a small number of TWA victims (even though it was not from the ruler pocket, but there was compensation, and the person who was supposedly in charge of the operation was as part of an intelligent (humanitarian) deal recently released).

But the question raised among most Palestinians in recent survey (62% percent in West Bank, 49% in Gaza Strip, and 78% in Europe and North America). So the question was raised “Why Palestinians  are denied from such compensations?  They were and still victims of Israeli aggression and occupation? Why is it that Jews get compensation till today, where Palestinians are not permitted to be considered as Jews in compensation. Aren’t they human like Jews.  One of my friends told me that in his childhood his dad was preparing to build their new home in their land near Jafa. The father bought the cement, the wood and the stones  in  1948, but they did not have the chance to have their own home built  in Palestine as the family planned. It is amazing to live on the hope to return to one’s home for sixty years and not expect compensation.

History told us, in secret or loudly announced documents, that rich people and even some rulers have sold large pieces of Palestinian lands (total some thirty villages, and compensate away from other peasants of the time ) to the Jews who bought these lands and settled on it.

In conclusion,   I strongly support the idea. I think it is a legal question: Why Palestinians are denied to practice their right to have compensations for their lands, business, and possessions after leaving their land by force? The question in itself may contribute in solving the almost century conflict in the Middle East, as well as Palestinian naturalization in host countries, which will be next dealt with. (608 words) www.dryahyatv.com

Hasan A. Yahya is an American Arab scholar, and a professor of cultures and sociology. He published 19 Arabic and 8 English books and 200 plus articles on sociology, psychology, politics, poetry, IQ Test Measurement and short stories in both Arabic and English. His articles may be found on articlesbase.com, Face book and other internet sites. His recent book published on Amazon titled: Therapy Cases: Mental and physical, 2008, and Lawlaki: Poetry Diwan, 2000 Bayt Min al-Shi’r al-Arabi. (all in Arabic on amazon- 2009). His recent activities reflects his talents and knowledge on youtube’s Dryahyatv.com Dr. Yahya resides in Michigan, USA. Dr. Yahya has four children and eight grandchildren.

Article Source:http://www.articlesbase.com/strategic-planning-articles/bold-ideas-concern-arab-palestinians-and-jews-1378864.html