Many people think hard money lenders to be legal thieves and some of them denote these lenders are sharks. Generally, people having these thoughts about the lenders would not have already dealt with them. They would just say this because others around them have a wrong thought about the lenders. If an individual is facing bankruptcy or foreclosure, the real estate hard money lenders in New York can actually be life savers.
Of course, it is true that their interest rates ranges from 17-25 percent and it will be still more if the risk involved is higher, but they do not worry about the credit history of the people seeking their help. In addition to a higher rate of interest, there are great chances that they will add two to ten percent of origination fee as well to the amount. Also, they will be applying exit fee of pre-payment if an individual comes forward to repay the borrowed finance before the duration of the loan. However, the greatest relief for borrowers is that these are generally provided for short term ranging from two months to three years and so they can repay within a maximum of three years.
As credit history, the hard money lenders in New York also do not look for business references or income earning capacity of the borrowers. Loan is generally offered on the basis of the value of the borrower’s property, which is obtained as collateral security. Generally, when it comes to getting money from traditional banks, the borrowers will have to talk to many people and different checks will be conducted for ensuring his repaying ability. But, these types of checks can be avoided when money is borrowed from these private lending companies or individuals.
There are professional lending companies providing hard money for real estate properties and they also act as commercial lenders in NY. Sometimes, the owners of commercial establishments might be in need of some money for rehabilitating their business or for getting some new contracts. So, these service providers offer bridge loans to these people as a means of helping them to improve their business.
As mentioned earlier, most of the hard money lenders will levy pre-payment penalties, when a borrower repays the money before the completion of the period. But, some commercial lenders in NY, do not charge any such fee and also they do not charge any application fee to the people seeking their help.