Finding hard money lenders is slightly easier in the New York area than in other areas. One of the primary reasons for this is that these lenders typically try to operate in familiar territories and in an area like New York where there is plenty of real estate for consideration. So here lenders will also have many more customers rather than the relatively sparsely populated areas. This naturally creates a greater 'pull' for private individuals to come and do business here.
Hard Money lenders are the private individuals and companies who will lend to you to buy a house – for instance, when the other more traditional financial organizations will not. This can be due to a host of reasons which can range from bad credit ratings to the desire to purchase the home in a remote area with which the traditional organizations are not comfortable.
A few tips to find Hard Money lenders in the New York area:
1.The phrase Hard Money lending sounds a bit intimidating and you will find that the same thing is known by other names. So instead of looking for Hard Money lenders look for Creative Financing in the New York area or look for Participating Financing while browsing through the web.
2.Go through the classifieds of the local newspapers and there again instead of scanning for Hard Money lenders look at the description more closely. Watch out for words which talk about loan problems, private money, dream home etc.
3.Call up your mortgage broker and ask if they have contacts to private investors or if they are aware of individuals who may know hard lenders.
4.Make full use of brokers in this case. On the web while you may not find a whole lot of Hard Money lenders in the New York area directly, if you do a search you will find that the search results will give you some links to blogs of individual hard lenders. Many of these individuals are not in the business directly but will know people or companies who can often help you.
5.When you are looking for Hard money lenders you may (from time to time) end up getting in touch with a loan predator, these are individuals or companies who make the deal in such a way that there is a high chance of you defaulting On your payments. You must be wary and ensure you are comfortable with their reputation by seeking the contact numbers of other individuals that they provided provided loans for in the vicinity of New York and where possible, go and meet them. Another way is by ensuring that the equity you have in your house remains around 50% and in most cases you should be safe.
Can I get a loan to buy commercial property in New York?
While hard money lenders usually lend for the purchase of a home or a residential property, many firms are now coming up with ways and means with which they can creatively design a loan so that people can buy commercial land or property as well.
What are the terms of these loans?
Typically the interest rate is higher, around 12% – 18% and the loan is a first mortgage in almost all cases with the balloon payment due after one or two years. These loans are characterized by their high fee and relatively lower loan to value ratio. Apart from the interest rate, there is a fee which can go up to 8% of the loan amount. The hard loan money lenders want to keep their loans safe at all times and for that reason because they need to ensure that you have sufficient equity in your house in case of default they can sell and recover their loan.
All in all, even at the risk of striking the obvious, hard money lenders should be your last resort but they are not loan sharks and can be used to get away from a tricky situation if you assess your requirements and your financial position correctly.