More and more banks are asking for your left arm as well as your first born child when applying for a San Diego Real Estate loan. Slight exaggeration of course but it sure seems like it’s not far off. With tax returns and paycheck stubs required along with everything else under the sun, more people are leaning toward San Diego Hard Money loans.
San Diego real estate has skyrocketed the past few years. Try to get a bank conventional loan for let’s say a $600,000 house, the bank officer is going to want to know everything about you.
San Diego hard money loans are becoming more popular with the bank crackdowns. Credit or rather sub-par credit, is not an issue with hard money since it’s an equity based loan.
These lenders mostly care about equity in the property. Gauging the Loan-to-Value is more important than seeing your IRS tax return. Because the documentation is minimal, the property’s value means everything.
Most San Diego hard money loans are 6 months in duration to 2 years with usually a balloon payment at the end. Upon the loan’s maturity date, the borrower usually sells the property, gets a new loan or extends the current loan.
Many people think these short term loans are only for fix and flippers. That’s not true. There are numerous people who own San Diego real estate as a rental and want to take some equity out through a refinance.
Some people receive San Diego real estate through an inheritance. Until the heirs figure out what they want to do with the property, pulling money out with a San Diego Hard Money loan can solve a lot of cash challenges. It can also help with the rehab to eventually sell it for much more.
For investors who invest in Los Angeles hard money trust deed mortgages, it can mean a higher interest rate than they are currently getting. As of this writing, bank interest in a CD pays about ½ to 1%. With inflation being anywhere from 3 to 8% depending on what stats you believe, you are literally losing money in a savings account.
Yes, these loans are not for everyone. Crunch the numbers and find out if a San Diego Hard Money loan is for you.