It’s a similar concept to having a credit card but much larger in credit limit. A Home Equity Loan is a credit facility secured with a first mortgage on a residential property. It allows you to withdraw funds up to a set limit (the equity you have in your home) at any time.

A Home Equity Loan allows you maximum flexibility with your finances.

You can use the line of credit to carry out renovations, invest in shares, purchase another investment property or pay the bills.

Consider the following pros and cons before you decide on a Home Equity Loan:

Pros of a Home Equity Loan

* A home equity line of credit offers a much lower rate of interest than credit cards
* Interest paid on your home equity line of credit is tax deductible, a benefit not available with credit cards
* Flexible payment options – Some lenders offer interest only equity lines of credit which gives you the option to pay only the interest for a pre-determined amount of time or pay interest plus as much or as little principal as you want
* Accessibility – Money is easily accessed by cheque or ATM card linked to this loan
* Repayments can be made in full or on a monthly basis
* Extra repayments are allowed at any time
* Cheque book facilities are available if needed

Cons of a Home Equity Loan

* The interest rate of a home equity line of credit changes with the prime rate. There is also a margin that is added to the interest rate, which is fixed and is determined at the time of application
* Typically attracts higher interest rates than your standard variable rate loans

Low Doc Home Loan: If you are self employed and don’t have your financials in order, don’t scratch your head wondering if you can obtain finance or not.

One option most lenders offer is a simple and quick loan called a Low Doc Home Loan. Low Doc Home Loans cater mainly for self-employed borrowers who are unable to provide full financial statements and other evidence of their income.

More and more lenders are adopting the growing trend of low doc home loan products on the market with many lenders offering standard and premium ‘low-doc loans’, with the choice of fixed or variable interest rates.

With access to hundreds of lenders and the leading home loans on the market, you can be sure with DirectMoney HomeLoans, we will find the best rate and featured home loan for you.

Depending on the lender, some require you to pay for Lender Mortgage Insurance (LMI) if your loan reaches 80% loan to value ratio (LVR). Due to the risk associated with self employed customers some lenders also charge a higher interest rate for these products. After a period of time, or when customers are able to show their tax assessments, then the lender may reduce the interest rate for you.

Consider the following pros and cons before you decide on a low doc home loan:

Pros of Low Doc Home Loans

* Proof of financials is not needed
* Simple statement of financials required instead of a tax return
* Non-traditional and irregular income sources are considered

Cons of Low Doc Home Loans

* You pay higher interest rates and fees
* Your cash flows might suffer due to higher repayments

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First of all, what is hard money? Hard money is money borrowed from a private individual or small lending firm that lends out their own cash. Put differently, it’s borrowing money from a person rather than a bank, and is subject to that person’s whims, not the bank’s loan programs or rate sheets.

Practically speaking, this means that hard money loans are very expensive and very fast. Interest rates range between 12-20%, and points, or percentage charged up front as a closing cost, range between 2-8%. These loans are not for everyday home buyers, as you can probably appreciate.

The terms are usually very short, usually no more than a few years, and loan to value (LTV) ratios are extremely low. So, if a property is worth $130,000, a hard money lender may only lend $75,000.

So what’s the appeal of a hard money loan, with all of these drawbacks?

Hard money loans are FAST, for one thing. While the bank will usually take a month to close, a hard money lender can generally close in a week, sometimes less. So if you need money to buy a property quickly, for example from a distress sale, you might need a hard money lender in order to settle in time.

Aside from their speed, hard money loans are much easier on the borrower, since they require far less documentation and paperwork. The reason for this lies in the lender’s security: hard money lenders are lending against the collateral, not against the borrower. If you default, they know they’ll get their money back, because they’ve only lent out a small fraction of what the property is worth. So, borrowers with bad credit or income that’s hard to document might go to a hard money lender because they will be less discriminating about these factors.

So who should use hard money lenders?

Homeowners really have no business borrowing from hard money lenders, due to the high expense and short terms of the loans. Seasoned real estate investors, on the other hand, may decide that a hard money loan is worth the added expense, if they need to settle quickly and efficiently. Some investors may not have a choice, given their bad credit or un-provable income, and have to use hard money lenders because banks won’t talk to them.

Hard money loans are particularly conducive to renovation or construction loans, because they’re quick and flexible. When a developer or real estate investor has a tight timeline to finish the work on their investment property (which is always), they may not want to wait a week for the bank to get an appraiser out to the property, send the draw check through processing, etc. every time they need a draw, and opt for a hard money lender for a quick turnaround times. Landlords who buy shells to renovate and hold as rentals may choose hard money loans, since they’ll be refinancing as soon as the house is finished anyway.

Anyone considering real estate investing as a career should establish a relationship with at least one hard money lender and at least one small, local bank, as local banks can often provide similar loans as hard money lenders without the expense. There will come a time when you’ll need money fast, and there will be others with a cheaper loan through the bank will work fine, so be sure to have several types of lenders in your speed dial, and make sure they know who you are.

Read more articles for landlords and real estate investors at EZ Landlord Forms, along with free real estate forms and real estate investing tips and resources.

Hard money is financial backing from private investors in the form of a loan. It is one of the best ways to get a business project off the ground, but you have to know how to obtain it the proper way.

Hard money loans are often used for construction projects. Typically, the lender loans the money in stages.

For example, let’s say you own a plot of land and you want to develop it. A lender will agree to back you on the project. They will loan you a percentage of the money at the beginning of the project,more during the middle of the project and a final installment near the completion of the job.

Lenders often pay the contractor for their work directly. For instance, once your contractor completes the foundation of the new building, the lender pays them a specific amount directly. Then, when the electricians finish wiring the building, the lender pays them directly as well. All contractors receive their payments direct from the hard money lender.

Private investors often prefer this approach because it gives them greater control over their money and their investments. You don’t have to be a big real estate mogul to get hard money from investors.

Many investors are willing to support many different types of projects. Private investors will financially back projects like single family residences, condos, townhouses, apartment buildings, hotels, motels, office buildings and shopping centers. However, they will not usually invest in undeveloped land.

While hard money lenders are willing to loan to residential investors, they most frequently invest in commercial real estate. This is due to today’s instability in the housing market.

Commercial investments are simply a safer bet for recouping funds an investor puts into a project. Because of skyrocketing foreclosure rates in the modern housing market and property values dropping at record rates, there is considerably less risk involved for the investor in commercial projects.

Commercial real estate is a very competitive market, but hard money investors are willing to buy properties, remodel existing structures and even build new properties. The commercial real estate market is still alive and well. In fact, today’s commercial market is very similar to the residential market that profited so many people just a few years ago.

Hard money lenders are still in the game. In fact, they are busier than ever because banks are making the lending process more exclusive than ever due to a record number of people defaulting on their loans.

Knowing how the private lending process operates is half the battle when it comes to finding private investors for your commercial real estate project. With a little research and networking, you will find the perfect backer for the commercial real estate project of your dreams. The hard money for the project is out there; all you have to do is find it.

Yanni Raz mentors many in the Real Estate Mortgage industry. Yanni Raz tutors homeowners in California and helps many of them save their homes.
Hard Money Loans

It is funny, but it is not necessary to suffer from the big monthly mortgage payments. By finding lower mortgage refinance rates you can get a big relief and relieve money from your home equity every month.

1.Your Interest Rate Can Be Lower.

This is the main reason for new mortgage refinance rates. It is natural to check, that you are paying competitive price for your mortgage.

When the U.S. economy and also other major economies continue to slip, interest rates are lower than they have been for a long time.

The economy offers a great chance, because if you bought your home 5 or more years ago, you may have an interest rate, which is higher than the market prices at the moment. By new mortgage refinance rates you can just benefit a lot and earn money.

You can also change your adjustable rate mortgage into fixed rate loan. In this way you can enjoy the security and benefits of low interest rates during a shaky economic situation.

2.Target To Lower Mortgage Refinance Rates, If You Have Difficulties To Make Your Monthly Payments.

Some homeowners take simply too big mortgage loan and will then suffer from heavy financial burden, which has strong negative influences over their whole life.

By getting new mortgage refinance rates they can change the monthly payments reasonable, which will help their lives greatly.

3.Improve Your Credit Rating.

It may have happened that you took your mortgage during a time, when your credit rating was not so good, you may not have secured the best rate possible. If you have a chance to create a better credit rating, the money becomes cheaper.

If your financial habits have improved, you have made your monthly auto loan and home payments plus credit card payments on time, your credit score is most probably higher now and with new mortgage refinance rates you can really earn money every month.

4. You Can Maybe Cancel Your Private Mortgage Insurance.

Lending companies ask typically additional insurance, if you have bought a home with a down payment less than 20%. Now the value of your home has most probably increased and this gives a chance to cancel the insurance, which is not valid any more.

Some people also want new mortgage refinance rates to be able to pay for their childrens college fees. Every home owner does his own decision, whether he will check mortgage refinance rates and he will find out new, better rates, what actions he should take. With the current economic situation you may think, if new rates would be of great help to you and your family.

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This is basically where the lender pays the borrower instead of the borrower paying the mortgage to the lender.

You may be wondering how this works. Basically the lender will pay you either a lump sum or monthly payments determined by the value of the home and how old you are. The more valuable your home and the older you are, the more money you’ll be able to get.

The reverse mortgage comes due at the end of the permanent occupancy of the senior in the home. When you move out of the home permanently, the reverse mortgage comes due.

One of two things may happen at that point in time. The home may be refinanced with a regular mortgage. This works well if the heirs or seniors decide they want the home to “stay in the family” or be able to have a say in who gets the home.

If the seniors or heirs decide to “walk away” at that point in time without arranging for refinancing with a regular mortgage, the lender or bank will take ownership of the home.

The reverse mortgage is a “non-recourse” loan which means that the amount due will not exceed the appraised value of the home.

Reverse mortgages require counseling by a 3rd party provider specifically so that seniors understand what the consequences are as well as the advantages of reverse mortgages. These 3rd party counselors are also required to explain alternatives for funding for seniors 62 & older as well.

Your local loan officer or mortgage broker that you communicate with on pre-qualifying or determining about how much you may get from a reverse mortgage will provide you a list of approved 3rd party counselors for you to visit with prior to committing to a reverse mortgage.

In addition to reviewing several options with you, the 3rd party counselors will make sure you understand what will happen to your home once the reverse mortgage comes due.

The nice part about all of this is that as long as you are the primary resident in your home, the loan will not be due. This means that until you permanently move out, the home still belongs to you. This will all be explained by both your loan officer as well as the counselor you’ll work with on the reserve mortgage.

Many seniors choose to pay off the existing mortgage which can easily be done if the numbers work out and there is a lump sum remaining or monthly payments. In fact as a note to add to this reverse mortgage article is that you can usually elect to either accept a lump sum payment, take monthly payments or a combination of both.

Brian Armstrong is a loan officer and licensed to establish Utah reverse mortgages.

You can read more about reverse mortgages on his website.