A Guide to Private Money Lenders

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Across the United States, there are a large number of people who have to deal with financial hardship and financial problems. Sometimes this is due to the fact that they do not make a lot of money and sometimes this is because people have a hard time understanding their finances. This means that the average person will most likely have a difficult time knowing how much of their money they need to save and how much they should spend.

There are many scenarios in which people in the United States will look to help for money. These situations can involve someone seeking help from a hard money lender for private money loans. This can sound intimidating but if you educate yourself as to how this process works, it may be favorable to you. Here are all of the facts surrounding getting help from a private hard money lender.

Private hard money lenders off hard money, which is different from the other types of financial offers that people will get from money lenders. Hard money will come with higher interest rates and lower loan to value ratios. In turn, this means that the interest rates for hard money loans will start around 15% or higher.

Upon contacting a private hard money lender for a hard money loan, there will be a requirement for securing the loan with a property with 50% equity so that way the investor is protected. This is because a private hard money lender may be worried about loaning a large sum of money if they may never get it back. So it is important to seek out a loan so that way you can have something you can manage that will not grow out of hand.

Plenty of people will choose to work with a private hard money lender because there is a quick turnaround involved. This means that within 14 days the deal will result in the loan money being given out. So people will seek out the help of private money lenders because they need help quickly and cannot wait a month or so for the money to be lent out.

Duration or payment period for a private loan is also shorter compared to the traditional loan which can usually go from 1 year up to 20 years while private loans can only be granted with duration of up to 5 years. Most people will buy their homes with a 15 or 30-year mortgage and this will make it so that the home prices will increase over time. As the home buyer grows older their home’s equity will increase as well.

For people who are below the age of 35, the median amount of home equity is just about $20,000. The Federal Reserve recently released some numbers in regards to consumer debt. This reveals that in May 2015, the amount of consumer debt managed to reach nearly $3.4 trillion. This number is absolutely appalling and should say something about the current debt crisis that is taking place in the United States amongst civilians.

In Conclusion

Working with banks for loans or seeking out the help of a private hard money lender will seem incredibly intimidating at first. No one wants to be in debt at first glance and even upon a second look, they may have the same answer. However, the harsh truth that people have to live with is the idea that there are more people in debt then there are people who are ot in debt. With the increase of student loans over the past five years, there are more and more people who are growing up with debt as well.

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