When we do a loan, there are several components that must be addressed. The three main ones are the property, including its value, the borrower’s ability to make payments, and the borrower’s credit.

The Property

The most important part of doing a loan is the property itself. The most important thing about the property is the current value. Even homes that have been trashed or that have been neglected and are in bad condition we are able to lend on. As long as there is enough value in the home compared to the loan that is being done, it’s okay.

There was one hard money loan that we did on a property that had 3 units but one of them had burned down, leaving only 2 units left. We got an appraisal to determine the value of the property with only the two remaining units. There was enough value so we did the loan.

Unusual Properties

One of the benefits of being a private money lender (a.k.a. hard money lender) is that we can lend on properties that other lenders can’t touch. For example, we have done a loan on a property that had a regular house on it and a manufactured home.

We have done hard money loans where the property had a manufactured home on it that wasn’t on a permanent foundation. Any mortgage company or bank would consider this is an unusual property, but we were able to come up with a solution to do the loan.

Ability To Pay

The ability to pay is an important part of any loan because we need to make sure that the borrower is not going to end up in foreclosure. It is vital that the borrower can make the payments and not lose their investment.

This does not mean that we have the same requirements as the banks. Banks require borrowers to provide very specific documentation to prove their ability to make payments, including tax returns, W-2 forms, and paystubs.

Because we are not a bank, we can use less conventional methods of making sure someone can afford the loan they are getting. This is a pretty general statement but that’s because there are so many ways to do it.

Hard Money Loans For Bad Credit

The first two parts are very important but the credit is not usually a big part of the decision to lend to someone. In many cases, we see credit that has been damaged by late payments, foreclosures, short sales, and bankruptcies.

Sometimes people have bad credit because of a divorce, an illness or losing a job. Other times, their business went through a slump or things just fell apart. Regardless of the reason for bad credit, we don’t believe you should be prevented from getting back on your feet.

We have done loans for people who had great credit scores. We have done loans for others who had credit scores below 500 because the only accounts they had were sent to collections. We have also helped people who had no credit at all.

One hard money loan that we did was for a borrower who needed to pull cash out of a rental property so he could pay tax liens and child support. He had plenty of equity in his property but had no accounts that he had paid on time. Everything on his credit report was bad.

We Can Help

Since everyone has a unique situation or challenge, we find out what yours is and figure out the solution to it. We don’t try to make a one-size-fits-all loan. Instead, we take the time to ask the right questions to find out what the problem is and what is preventing you from solving it. Then, we work with you to come up with a solution.

To get your questions answered call us at 855-526-2900! Or submit a contact form with some of the details of your situation. We would love to help you solve your problem.