All You Need to Know About San Diego Hard Money Loans

by Morgan Scott at Scottway Capital

In San Diego California, when one discusses real estate loans the term 'San Diego hard money' often comes up. But what is hard money exactly? Well, hard money is also known as private money and it is used when describing any loan that is made by either a private person or an entity. When it comes to real estate transactions in the California area both terms are frequently used.

Private money differs from conventional loans in that private money, or San Diego hard money, is based solely on the property's collateral. That is why it is commonly found that these loans are written way beneath the actual value of the property concerned. Basically, the investor wants to ascertain that the available equity would be enough to cover any loss or default by the borrower.

Whereas usually private investors provide the hard money loans, they can also be provided by private institutions and entities.

It is always worthwhile to determine whether private money is the right option for your needs. Determining this requires you to consider a number of different variables. First of all, before you decide to make use of private money, you should always consider conventional sources of money. Conventional sources would include national and regional banks and credit unions. When it comes to the best competitive pricing and terms for the borrower, these sources are the best solution.

However, you may find that a normal bank does not wish to finance your transaction in which case you can then look into whether or not you qualify for a private money loan. To be able to take advantage of this option you will need equity in the transaction as well as the ability to repay the loan at two or three times the amount you borrowed in interest and other fees.

This may well cause you to question the logic of utilizing San Diego Hard Money. But there are times and occasions when using this type of loan makes sense. Reasons for using private money would include:

When you require a Bridge loan.

If you require cash in order to buy property.

You have to renovate a property to sell.

If you are in short escrow and you need to purchase without delay.

For financial reasons you find that you need to access the equity in your property.

You have a bridge loan that needs an extension.

You are unable to get finance from banks because you have lots of properties.

The bank will not loan you more because you have a unique property.

Although you have strong equity and you are able to repay the bank refuses to finance you due to a troubled credit record.

You require a temporary cash flow for your business.

When it comes to private money, as with most things in life, there are both advantages and disadvantages. Private money is usually expensive and in most cases it has shorter terms than the majority of bank loans. But, because of the speed and flexibility of these loans they are very convenient and valuable. For many borrowers with California real estate needs it can be a very practical tool that they can make use of.

San Diego hard money is not hard at all! Unlike a bank loan which can take a while to process, hard money loans usually do not take that long. But, because of the attached fees and the terms and conditions some people feel that it is not a worthwhile option to consider. Although not everyone will find it the right solution for their needs, hard money is often the right way to go for many others.

Morgan Scott is a California licensed Real Estate Broker specializing in San Diego Hard Money. If you've enjoyed all the exciting information you read here about San Diego California Private Money,you'll love everything else you find at Scottway Capital Hard Money  and What is Hard Money?

Visit Scottway Capital for all your San Diego Hard Money Needs! We're in Old Town.