Private Money Mortgage
Private Money Mortgage is primarily used by investors and perhaps people with bad credit who cannot get a conventional loan.
Private money is also a source for "hard money" loans.
Factors affecting Hard Money Mortgage
Hard Money Mortgage is influenced by the collateral. In most real estate deals, the collateral is a property that is free and clear or a recently purchased property where the buyer has put a substantial down payment.
Recent Appraisal and Comps
Investors prefer people who have some "skin in the game." In other words, the buyer should have put in some money for the down payment of the property. A typical Loan-to-value or LTV can range as low as 50% or as high as 65%. The profile of the borrower and the overall application will determine this factor.
Financials of Borrower
The borrower should have good financials in terms of income and assets. Money in retirement plans and 401K is an additional asset.
Executive Summary
Executive Summary should be brief and address the facts about financials and credit history. If the credit history is not good, an explantion about it always helps. In addition, it should address the fact that if the borrower were to default, the investor would be able to recover all the money by selling the property.
Private or hard money lenders have the money to lend and are always looking for good scenarios where they can lend out the money.
Return from Private Money Mortgage to Home
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