Tag Archives: property
Car title loans: For Urgent and Emergency Funding Only
The borrowers who receive car title loans are entitled to keep the vehicle and drive it as own car. But a set of its keys is required to be left with the lender. Car title loans are not difficult to avail if the borrower owns a home or any such property of his own and if the same property is allowed to be used as collateral. By this way the lenders ensure that they can grab this property in case the borrowers do not pay back the money plus interest in full and within stipulated time. Anyone who is badly in need of funding within a short time and who is confident in respect of regular payment within the very short repayment tenure can try for car title loans.
It may happen in some cases of car title loans that the lender keeps the car in his possession and hands over the vehicle to the borrower when he clears the loan within the payment duration. The borrower may reach to very sad state if he, for any reason whatsoever, fails to pay back the money lent. At this stage the lender can dispose of the vehicle in order to realize the money paid as loans.
In the finance market there are plenty of lenders whom the borrower can contact online. Banks and financial agencies have provisions for car title loans. If the borrower surfs the web sites he will learn in details about the terms and conditions provided by different lending authorities. If he does this with patience he may discover any favorable options in car title loans. He will just submit application for the chosen car title loans online and money will be transferred to his bank account as and when the lender approves the application.
Car insurance should be bought immediately after the borrower gets the title of the car. He will have to produce electricity or telephone bill to document proof of his address. He will have to produce documents as evidence of ownership of his home in case the home is used as collateral. The borrower must be at least 21 years of age and must be employed in any concern for the last twelve months with minimum monthly income of $1000.
The amount of loan depends on the decision of the lenders but the rate of interest in case of car title loans is usually much higher and the repayment period ranges from 15 to 30 days only.
Thus anyone can understand that car title loans are for urgent and unavoidable emergency funding only.
Hard Money Loans
Commercial Hard Money Loans
Commercial Hard Money Loans are real estate loans based primarily on the collateral. Real estate collateral is the protective equity in the real estate transaction, and is the primary factor in qualifying for a Hard Money Loan. These types of loans are typically provided by Private Lenders who are looking for sound transactions based on equity and not on credit scores.
Hard Money Loans are an option when a real estate transaction falls outside the parameters of conventional lending standards of banks, life insurance companies, and other sources of traditional loans. Conventional loans are based on the borrowers credit and income, but credit and income are not primary factors with hard money loans. Banks have government regulations to contend with, where as regulatory red tape can be bypassed with Hard Money loans due to their origination being with Private Lenders.
Private Lenders, or Hard Money Loans, are a source of funding for:
* Property acquisition with little or no cash from the borrower.
* Short term cash for development, or to rehabilitate property.
* Investment capital instead of a business partner.
* Transactions that need to close quickly.
* Transactions that dont qualify for conventional financing.
* Borrowers who dont have the normal income documentation banks require.
* When other properties, or assets can be provided in tailoring a loan.
* For sound transactions that make sense to use this approach.
Being a Private Lender and not a bank allows the Lender to make quick decisions. It also allows the Lender to provide more flexibility in structuring the deal. There can be many advantages when working with a Lender that can tailor the transaction and make quick decisions.
** Benefits of using Hard Money Loans **
1. Easy Application Process – Private Lenders base their decisions on the current quick-sale market value, the purchase price, and condition of the property being offered as collateral.
2. Uniqueness of the collateral – special use properties and personal property, which are not acceptable to a bank, may be considered by the Private Lender.
3. Flexibility – Private Lenders have the ability to tailor the loan to meet the needs of the
4. transaction.
5. Seasoning – a property without a track record of payments can still qualify.
6. Quick Closings – since the propertys equity is the primary factor, less information on the borrower is required.
7. No Pre-payment penalties – Hard Money Loans are typically used for short-term situations.
8. Therefore, in many cases early payment of the loan does not penalize the borrower.
9. Pre-qualification – allows borrower to be a cash buyer.
Although understanding the benefits, what most borrowers consider the downside of Hard Money Loans is the interest rate.
Yes, the rates are higher than conventional financing, and if that was the only consideration then Hard Money Loans might not look like a viable means of financing. However, when a borrower is analyzing the entire transaction and not just the expenses, the borrower may well find the profits far out ways the short term costs. To illustrate this, in a recent transaction a borrower paid what he considered an exorbitant short-term interest rate, but after he netted $3 million in 30 days in flipping a commercial property, the rate was really inconsequential.
It is the quick and flexible access to capital that makes the borrower money. When considering rates, consider that “time is money.” What are the benefits of a quick acquisition? Does the Hard Money Loan allow the borrower to make money on real estate that would otherwise need to be bypassed?
Many transactions seeking financing, dont meet the requirements of a bank loan, dont have adequate borrower credit, income or documentation, or involve commercial property that is in some stage of need of repair. These factors increase the risk of the transaction and eliminate the conventional lender as a source of funding. Private Lenders will accept the risk and this is reflected in the interest rate. As in all things financial – the higher the risk, the higher the rate of return.
Instead of forfeiting a deal, work with a Lender that has the ability to offer alternatives and meet critical time lines. For many commercial borrowers Hard Money Loans have become an alternative source of funding they rely on to generate profits.
** Tips **
* Work with Lenders who are themselves Investors instead of bankers. The will have a better understanding of what you need and what you will be faced with.
* Consider the Lenders involvement as a positive. The more feedback they can provide, the more dedicated they are to your project, the better chances of your success.
* Although other real estate and personal assets can be provided for additional collateral, so you dont lose everything in the event of a default, consider properties that have the equity to support the transaction by themselves.
* Ask that the Lenders process be explained in detail – step by step.
* Understand the different fees and amounts charged by a Hard Money Lender.
* Use Hard Money Loans when you need: quick closings, have an opportunistic acquisition, rehabbing distressed property, sale/leasebacks, bridge financing, construction, short term financing, transactions that dont meet normal bank standards, and avoiding foreclosure.
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Funding Projects
For assistance in funding a project please review information from The Project Corporation, a professional consulting firm with expertise in business funding.
For more information on obtaining funds from the capital marketplace please visit Business Loans and Venture Capital