Despite calls to modify the Dodd-Frank business regulations, conventional lenders have continued with very stringent underwriting requirements that prohibit many good borrowers from being able to borrower the mortgage money they need. A private hard money mortgage loan is a great alternative to the conventional lending sources.
Sometimes, borrowers do not meet the bank’s minimum credit score requirements, the borrower’s debt to income ratio is too high, the property is unusual or in disrepair, or the debt service coverage ratio on a commercial property is not what the bank demands. These are just several of the reasons to seek a private money mortgage.
We fund these real estate transactions using money from high wealth individuals. To protect our private investor’s hard money loans, we cap our loan to value at a maximum 70% of the current market value. Of course, there are other factors to consider such as location, condition, type of property, and risk.
Below are some of the top reasons when to use a hard money loan for your real estate goals.
1. Need quick closing: A traditional loan takes considerable time to underwrite and fund real estate mortgages – averaging 45 days on residential and 75 days for commercial loans. Many borrowers need something done quicker. At Cushner Capital Group, can close and fund the deal typically in 5-10 days depending on the transaction
2. Credit/financials don’t fit traditional guidelines: Because of the past recession many borrowers’ financials and credit were impaired. They no longer qualify for traditional lending. At Cushner Capital Group, we can close loans regardless of how rough the credit.
3. Property doesn’t fit traditional guidelines: Many times a property does not fit into the bank’s tiny box – below market rents, rural location, uninhabitable, oddball zoning -that prohibits a bank from funding a loan. Fortunately, Cushner Capital Group works hard to fund properties that don’t fit traditional underwriting guidelines.
Cushner Capital Group continues to be a leader in hard money lending in California for Owner and Non-Owner properties. We fund on both commercial and residential real estate. We look forward to working with you on your next non-bankable transaction. For more information, please call any time!