Frequently Asked Questions

1. What is a hard money loan?
    

2. What are damaged credit loans?
    

3. How can a hard money loan help me?
    

4. What is a bridge loan?
    

5. What is foreclosure?
    

6. Why would I seek an expensive hard money lender rather than a conventional bank?
    

7. What are Private Mortgage loans?
    

8. What is a Loan-to-value percentage or "LTV"?
    

9. What is a Letter of Intent, LOI or Term Sheet?
    

10. How do I apply for a hard money mortgage?

1. What is a hard money loan?
   A hard money loan is a short-term bridge loan that is used for acquisitions, turnaround situations, foreclosures and bankruptcies.
   
    

2. What are damaged credit loans?
   Damaged credit loans are loans made by lenders to people who have a history of bad credit or a significant blemish on credit such as bankruptcy. 
   
   Damaged credit loans are risky to lenders because of the higher likelihood that the borrower will fail to repay the loan. 
   
   As a result of this increased risk, damaged credit loans often have higher interest rates and larger penalty fees than loans made to people with good credit. 
   
   However, there are a number of quality programs providing damaged credit loans which are fair to the borrower.
   
    

3. How can a hard money mortgage help me?
   A hard money mortgage may be a good thing even if it does come with increased interest rates. The hard money loan can be used by investors who use "Other People's Money" to buy and sell real estate
   
    

4. What is a bridge loan?
   A "bridge loan" is financing secured by a piece of real estate you already own, a property that is typically in transition and being improved upon. The bridge loan is used to finance the rehab costs and is paid off when the property sells or permanent financing is secured.
   
    

5. What is Foreclosure?
   If a homeowner with a mortgage on their property fails to make payments on that loan, then the lender will file a lawsuit to take back the property for non-payment of the loan. This action is called foreclosure.
   
    

6. Why would one seek an expensive hard money lender rather than a conventional bank?
   Time Restraints – Conventional banks generally take longer to close.  They require a long due diligence period that the borrower may not have due to an approaching settlement or foreclosure sale date. Hard money loans can be closed on in as little as 1 week.
   
   Credit Score or Bankruptcy – Credit Score is too low, or Pending bankruptcy is not up to an conventional bank's standards.
   
   Type of Collateral – Conventional banks generally only lend on certain types of collateral.  If the borrower owns or wants to buy a property that does not meet conventional bank’s standards,  then hard money may be the only option for the borrower.
   
    

7. What are private mortgage loans?
   Private mortgages are mortgage loans which are funded by a private individual, trusts, partnerships, real estate investment groups and retirement funds. The private money mortgages are sometimes called a hard money loan or private money mortgage.  These loans are not offered by standard banks.  These loans carry a loan-to-value (LTV) percentage typically under 65%.
   
    

8. What is a Loan-to-value percentage or "LTV"?
   The relationship between the unpaid principal balance of the mortgage and the appraised value (or sales price if it is lower) of the property.
   
    

9. What is a Letter of Intent, LOI or Term Sheet?
   Letter of Intent or Term Sheet is a non-binding agreement between parties involved in a contract to move forward with negotiations or complete a project.
   
    

10. How do I apply for a hard money mortgage?
    You can apply for a hard money loan right here at our website.  Please click here.
     

We lend ONLY in The Bronx, Westchester, Yonkers, New Rochelle, Queens, Brooklyn, Manhattan, Long Island, White Plains, New York City, and Connecticut.