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Hard Money Loans are those that are based solely on the value of the property.  This hard money term generally refers to loans made to borrowers who are in or close to a foreclosure.  Foreclosure is defined as the time between when a borrower receives a "Notice of Election and Demand" (generally after borrower is more than 90 days late on their loan payment) until the end of the redemption period. Hard money loans can also be acquired before a borrower is 90 days late.  This is preferred since a borrower's credit report will be adversely affected once the Notice of Election and Demand is sent.

Some hard money loans require no qualifying and have no minimum FICO score.  Generally the lender will not loan more than 65% Loan-To-Value(LTV).  Rarely a borrower can get an exceptions to 70% LTV. Furthermore, certain areas of Colorado are classified as Declining Markets and many lenders are reluctant to loan there.  The same can be true in rural areas. 

Some lenders are now beginning to inquire about a borrower's ability to repay but that is a lender by lender requirement. New Colorado laws have required that Mortgage Brokers / Bankers investigate a Borrower's ability to repay the loan.  However, in cases of foreclosure where the Borrower will certainly loose his/her home, the rules are not so specific.

An alarming number of Hard Money Lenders are predatory.  That is, they want the property and will take actions to get the property through a second foreclosure. Two of the favorite tricks that predatory lenders use are onerous promissory notes and servicing companies that are slow to process payments and thus create late fees for the borrowers.  The borrower must use extreme care in selecting a mortgage banker/loan officer in this situation.  Be especially wary of web searches that highlight direct hard money lenders.

Interest rates are based upon the lender, the LTV, and the property location.  The interest rates are typically 12% or higher and there are fees in the amount of several points.  However, if the Borrower can save his/her house from foreclosure, then there are many thousands of dollars in equity to be saved that can go to the homeowner and not the bank.

Please call the author of this article (Mike Cotter at 877-656-8522) to discuss in detail the particulars of your loan and possible interest rates.   

You may also go directly to the APPLY NOW button located at the top of this page.