Hard Money Lenders: A Reliable Source Of Funds During A Financial Crisis

The wellness of the economy has developed over the last couple of months. Theoretically speaking the economic depression might be over; we might be developing gdp again. However, unfortunately, the credit crunch keeps going. Many banks are extremely worried about further damage commercial real estate values and growing commercial mortgage delinquencies. They worry that more large percentage write downs of their CRE portfolios may be necessary risking their legal solvency. Banks on the side are very skeptical about lending.

Other banks, even strong ones, together with insurance agencies are looking at their investment capital as they anticipate the approaching wave of new polices out of Washington. Regulators are enforcing existing procedures more strictly than before while ensuring even harder financing guidelines are coming. Loan companies won’t give a loan in earnest until they know what the regulating situation will seem like. While the government supports lending with their words they’re discouraging it with their heavy handed measures.

For many borrowers the solution has been private lending. Independently financed, referred to as “hard money” commercial mortgages are backed by private individuals or privately operated organizations. These special loan providers often secure the loans they write in their own investment portfolios instead of sell them to the secondary mortgage bond market. Private hard money lenders are not managed by the State or federal Government so they enjoy much more freedom and can fund loans faster than banks can. Multi-million dollar loans can close in less than 10 days if the offer works best for the hard money lender.

The disadvantage to private lending is that prices and points are greatly greater than bank interest rates and that much more collateral is expected. Private lending almost always top ten percent with at least 3 source points and loan-to-value ratios rarely exceed sixty-five percent

The financial recession has induced many good loans to be declined by banks. Further, dropping property values make it even more difficult to qualify for regular funding. Hard money lenders are often able to fund deals that financial institutions are being forced to turn away. Private lending has become a major part of commercial real estate finance. Borrowers would rather get a decent, low interest rate bank loan with decent terms and conditions, but that form of financing is not really readily available nowadays. Private hard money lending is now well-known finance and, for many struggling investors, may be the only-game-in-town.

Looking to find a lender to finance your mortgage? South Carolina hard money lendersare reputable lenders that has been in the lending business for years. Visit http://www.hardmoneylenderssouthcarolina.com/ to know them better.