In an effort to clear up any misinterpretations or misunderstandings about what hard money is, I’ve decided to send my friends a short summary on types of programs, how it works, and when it should be used. Many people have the wrong interpretation, some are scared away by the higher rates, and many just aren’t sure what it really is. I hope this email will explain all of those for you :)
As the rates have significantly come down over the last few years, and are now at record lows, it is definitely attractive to get a home loan or a home equity line at below 4% rates! However, those products frequently do not work for investment types of opportunities, which require quick closes, ability to close as-is, get 20% down on an investment property, and get the renovation costs financed (without having to go through a 60 day FHA 203k process of course!). Private money purchase loans typically close in 14 days or less, with certain circumstances requiring a 3-5 day closing! Won’t see that from a bank anytime soon.