Money Lenders

The costs that a money lender requires from an investor

If you have ever lost your source of income and gone through processes such as filing for bankruptcy, foreclosure and anything else that affects FICO scores, you probably understand the frustration of trying to access credit and being stonewalled by all formal financial institutions. The problem is that not many people in this situation understand that it is still possible to access credit and turn around their financial crisis. However, it is important to understand all the costs involved in the process. Here are a few of the costs that a money lender will require you as an investor to meet.

Loan servicing

If you have a loan that is not being serviced from your pockets, you will need the help of a PML in servicing it. The fee accrued for the servicing process varies a lot from one provider to the next. There are however situations whereby the loan is priced at a flat rate. For instance, the PML could stipulate that the servicing fee will be $50 dollars per month. In addition to this fee, there will also be other costs such as loan modifications, foreclosures, forbearances and other related costs.


There are certain times when you as an investor will be needed to advance funds in order to protect a loan investment. This mainly happens when the borrower does not meet the requirement of paying something that is part of a promissory note. The common types of advances include:

  • Reinstating a senior lender after a default.
  • Payment of delinquent property taxes.
  • Insurance coverage lapses etc.

The fact about the loans are that technically, advances are not a cost to you because they can be recovered. However, you will need to have money beforehand in order to give the cash advance. The ability to recover the money given out as an advance depends on the value of the equity that protects your loan investment.


If you are dealing with an investor and they breach the agreement, you as the investor will be needed to pay the cost of foreclosure. The process of foreclosure does involve a lot of charges. These include:

  • Legal fees
  • Fees to a trustee or sheriff
  • Recording and statutory fees

Normally, the promissory note requires that the advance fee to foreclose to be added to the balance of the debt. The probability of collecting depends on the value of the property compared to the debt that has been incurred.

Legal and advisory fees

When the note negotiation is taking place, you will be charged by your attorney. However, when the transaction is simple, we as the PML will take care of the entire processing of the document meaning that legal fees will not be a cost to you. For proceedings that are more complex, you will be needed to hire a legal team and pay them for the services.To Know maore about equity loans visit us on yelp.

Questions people ask about hard money lenders Houston TX

The private loan lending business is probably one of the most misunderstood sectors. There is too much misinformation, poor representation of our image and downright ignorance about the services we offer. This is probably one of the main reasons why people shy away from approaching us for solutions to their financial problems. The good news is that with heavy regulation from the federal government, there are more good players than bad in the industry and you can trust hard money loan services.  Here are some questions people ask about hard money lenders Houston TX.

In what ways can one participate in a hard money loan?

There are many investments that one can make out of a HML. For instance, you can use the money to buy an existing loan. It is also possible to fund a new loan. If you like real estate investing, you can use the money to invest in a mortgage pool. Another common investment is combined investments in a fractionalized note with other investors. When you come to us, we will explain every one of these investment choices to you and make sure that you choose an investment vehicle that will be beneficial to you.

Why is it called hard money?

The term is believed to have been coined from the fact that the money is lent to people that find it hard to access conventional credit. It is also meant to refer to the hard assets that are used as collateral to the loan. When you as the borrower pledge an asset as collateral, the asset goes hard as loan collateral. Watch our youtube video, we have recently started using terms such as private money lending because they are more professional and do not have the original hard money stigma attached to them.

How do lenders find qualified borrowers?

Unless you are interested in originating the loan yourself, we normally advice that you look for a qualified a PML close to you. PMLs take time to look for borrowers in their expertise field. With the help of a PML, you will be matched up with a borrower who meets the specifications of your loan. For instance, if you are interested in notes on construction loans, look for a PML that has experience in construction lending. In case you have some experience in lending, you can look for borrowers from online listings. Contact the ones that need the product you are selling and ensure to do due diligence before approving anything. Ideally, a PML will help you avoid the common pitfalls of the process.

Are private loans expensive to borrowers?

When you are in a position whereby you cannot access credit from the conventional sources, the cost of accessing credit becomes a non issue. The normal investor in a private loan wants to access credit using assets that banks don’t accept as collateral, within a shorter time and with less paperwork. This therefore creates a win-win between borrower and lender.

Dealing with hard money lenders

There are people that do not understand the financial options that are available to them when it comes to financing their real estate projects. Many get their dreams killed after they go to the mainstream money and mortgage lending institutions but don’t succeed. One of the often overlooked ways to finance your real estate project is getting help from us, hard money lenders. This is a little unconventional because instead of getting credit based on one’s credit score, you will get credit based on the property that you plan to buy.

Who needs these services?

Real estate developers and property flippers are the best candidates for these services. This is because they are allowed to borrow up to 100 percent of the purchase price of the property they have their eyes on. It is the ideal way to get property financing when you are confident that you can buy property and turn it down for a profit within a short period of time. However, it is important to note that we will need real assets as collateral for the lending. What most people do is borrow the hard cash, buy the property and improve it, then they use the property which is now under their name to take a loan and repay the lenders.

Developing a relationship with the local lender

If you are interested in making it big in the real estate business, but for some reason you do not qualify for a mortgage, you need to make friends with the local lender. This will help you get the money you need to buy some property within as little as 48 hours. When we the lenders know you are in need of urgent cash and have confidence in you, we will even allow you to take the money without tiresome and time-consuming processes such as appraisals.

The interest rates

Repayment interest rates used to be a serious hindrance when it came to dealing with the money lenders. However, times have changed and because of our need to deliver more affordable products, we have lowered the interest rates. In general, we will charge you 18 percent interest at most. This is 5 percent origination followed by 13 percent on a 1 year note. As you can see, this is a pretty competitive rate. This will help you achieve your development goals without having to break the bank.

Credit scores and HML’s

There is nothing that ruins the dreams of a potential investor than a poor credit score. The worst thing about credit scores is that they reflect the financial decisions you made up to 10 years ago. This means that if you made a mistake, you are likely to be stuck in a vicious cycle that involves lack of credit approval, and worsening credit scores as a result of missed opportunities. HMLs are supposed to break this cycle. They disregard your credit past and give you a chance to redefine your future.

Hard money lenders Houston; Asset Appraisal for the Loan

In the world of formal banking, the only way to determine the value of a loan is getting an appraiser to do it. This happens because loan officers and other bankers have tons of loans to process and they do not have time and the skills needed to evaluate all types of collateral. As a result, borrowers face limitation when it comes to the amount of money they can access from these lending institutions. The good thing about us as hard money lenders houston is that we have specialists in asset appraisal, and we are more flexible on the types of collateral that can be used to determine loan value. Here are tips we would like to share with you about asset appraisal.

The concept of multiple points of value

We recommend that you get different points of value that do not give one value estimate. The following are reference points that you can use:

  • Appraisals: this is a value report that is given by a licensed appraiser. The information it contains includes sold, pending and active comparable properties, photographs of the property, data and other analysis to support the estimated value of the property.
  • Broker Price Opinion: This is normally simply referred to as a BPO. It is a shorter report than that of an appraisal. If you decide to use a BPO, it is important to make sure that the broker himself views and photographs the property as opposed to them sending someone to do it, as it often happens when they are too busy. Note that when a third party looks at the property, it defeats the entire purpose of getting the valuation done in the first place.
  • Personal drive-by: We normally refer to this tactic as driving the comps. Instead of relying solely on what other people say about the property, take time and go down there to have a look at it. The best opinion you can get of any property is your own judgment. Interact with others people such as brokers, owners of the neighboring property and other people around the property. You will be surprised by how much you can actually learn from these people.
  • Looking out for the negatives: there are negative attributes to a property that can adversely affect its value. The negatives are different depending on the type of collateral. When performing an appraisal, it is common to deduct some amount of money from the best dollar value of the property in order to compensate for the negatives. However, note that the negative feature does lower the value of the property and make it less marketable in the future.

Issues that are normally considered as negative factors include the location of the house whereby if the surroundings have issues like high crime rates, value is affected. Lack of access is also another common negative.For Further details on money lending , please visit our website.