Hard Money Vs. Bank Money
Hard Money Vs. Bank Money
By Justin Kunst
Even though the economy is down money doesn’t just disappear. It gets funneled to businesses that prosper under certain conditions. Banks… are not necessarily one of these. No wonder they are trying to hold onto their money like a fat kid’s last candy bar.
Do not fear, hard money is here. Hard money, or private money, is money loaned by an individual instead of an institution. Many loan takers don’t even realize there may be a private lender living in their own neighborhood. Private lenders are like you and me, the only difference is they know how to make their money work for them.
Right now hard money lenders are king. Banks are giving money to less then 1% of applicants right now. Large cities do not just stand still though, and places like Miami, FL are doing everything they can to keep building.
As an example, I was standing in a print shop when a contractor came in for blueprints. I happened to mention I have a friend who’s a hard money Florida lender and he literally started drooling! His face lit up like a Christmas tree and he asked for my friend’s phone number. This type of situation is not uncommon, builders still want to build and people still want to purchase or refinance real estate in Florida.
What’s the difference between Hard Money & Bank Money?
| Hard Money* | Bank Money | |
| Qualification | Equity | Credit/Income/ Red Tape/etc… |
| Credit Check | No | Yes |
| Application Fee | No | Yes |
| Attorney Fees | Yes | Yes |
| Closing Time | Weeks | Months |
* Source: Hard Money Florida & Hard Money Miami
There are many advantages to getting a hard money loan. One of the only disadvantages is a higher then prime interest rate. This is because the lender is taking additional risks by not checking your credit or income tax. How to get around this? It’s easy; hard money to get started and refinance later.
There is one catch though, private lenders can not advertise on their own. It is illegal for a private lender to advertise without a mortgage brokers license and brokerage business licensed, so always do private lending though a licensed mortgage brokerage business. This requires some research because you always want to deal with a reputable source.
In Florida I personally recommend Franklin Karr Mortgage Company. They are a FL Licensed Mortgage Brokerage Business and Franklin Karr is a FL Licensed Mortgage Broker. He is also a Better Business Bureau member with an A+ Rating. They deal only with private lenders and do not check credit. I have personally worked with Franklin and his company is top notch. Click here to view his website.
If you want to purchase, refinance, or develop then a hard money lender can help you no matter what the economic condition. Keep in mind the differences between hard money and bank money and you are set. If in doubt about your mortgage broker always check with the Better Business Bureau to see a company’s rating. Feel free to take advantage of Florida real estate because you can now use a hard money mortgage broker like Franklin Karr who makes it easy.
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