Common Questions
-
What’s the difference between a “hard money” loan and a conventional bank loan?
A conventional bank loan generally requires the borrower to have a very high credit score from the credit reporting agencies in order to qualify and generally can take anywhere from 2 to 3 months if not longer from the commencement of the process until the loan closes. In addition, conventional bank loans often require the borrower to spend money on application fees, appraisals, surveys and a host of third parties utilized by banks in order to satisfy bank regulatory requirements and their own internal auditors. Hard money loans are loans secured by real estate collateral and can generally be made in a very short time frame provided the borrower is able to provide clean title to the property free of liens, judgments and/or violations and can often provide Borrowers with loan proceeds in excess of what a traditional bank lender may be willing to provide. In return for the increased proceeds, lack of upfront fees and drastically quicker turnaround times, hard money loans generally carry interest rates that are higher than a borrower might be able to get from a conventional bank loan assuming that the borrower would even qualify with a traditional bank lender. AJ Partners Lending is a private commercial Hard Money lender. AJ Partners Lending will generally only make loans with collateral that is non-owner occupied, however, AJ Partners Lending will consider cross collateralizing multiple non-owner occupied properties in order to provide sufficient collateral to secure the needed loan amount.
-
What are typical loan terms I might expect to find if I borrow money from AJ Partners Lending?
A typical borrower who is looking to borrow money from AJ Partners Lending with good collateral can expect an annual interest rate of anywhere from 12% – 14%. Borrowers have the option of entering into either a loan that pays interest only or one which amortizes over a period of years with the full loan principal in either case due when the loan matures which will typically run for 1 to 3 years but can be prepaid without penalty after 6 months.
-
How much does AJ Partners Lending typically lend to its Borrowers?
A typical loan from AJ Partners Lending will generally be in the range of $50,000 to $1.5M based on deal specifics and collateral value. AJ Partners Lending will generally lend up to 75% of the “as is” value of non owner occupied real estate collateral provided by the Borrower.
-
What happens if I default on my hard money loan?
Similar to traditional bank loans, hard money loans are governed by the promissory note and the mortgage entered into by and between the Borrower and the hard money lender. If for some reason a borrower is late on their hard money loan, they will generally be required to pay a late fee or default interest as set forth in the loan documents. If a borrower is still unable to remain current on their loan then the hard money lender will often pursue a foreclosure action in the same manner and governed by the same laws as are traditional bank lenders.
-
I need put a loan in place quickly, where do I begin?
If you need to find financing for your upcoming project and would like to discuss how AJ Partners Lending may be able to help you, reach out to one of our experienced loan officers and we will be happy to discuss your project and quickly let you know whether your transaction is something we can finance, what terms we might be able to offer you and what you will need to provide to us in order for us to move forward with your financing.
-
Do I need a certain minimum credit/FICO score to get a loan from AJ Partners Lending?
AJ Partners Lending does not require you to have a certain minimum FICO or credit score in order to secure financing from us. However, your credit score will be one factor that we take into consideration along with other factors such as your previous payment history, whether you have remained current on your previous loans, whether you have lost any properties to foreclosure or in a short sales, your current income etc.