If you need to borrow funds to refinance mortgage for your residential or commercial property, then you might want to try hard money loan. The funding for this type of loan depends on the value of the borrower’s residential or commercial estate. As compared to loans offered by typical commercial mortgage lender, hard money loan has lower loan-to-value ratio and higher interest rates. In addition, since this type of loan is usually offered by private individuals, there are no government agencies that back hard money lenders. This the reason why loans given depend solely on the real value of the borrower’s property.

So how does hard money loan works? Let’s take this scenario as an example. You need funds to repair your investment property, let’s say your house. The present value of your house is $70,000 and the cost to repair it would be $20,000. After repairing it, the value of your house would be, let’s say $100,000. Since hard money lender can only give you up to 70% of After Repaired Value (ARV), in your case, they can give you loan of up to $70,000

Although inertest rates for hard money loan is higher, it’s beneficial for borrowers who need financial help in renovating their properties before they sell it or have it rented out. In most cases, hard money loan lenders consider offering funding for income-producing properties such as motels, office buildings, shopping centers, apartments, restaurants, hotels, and medical institutions.  Aside from these, they too offer loans for bank workouts, bankruptcies, foreclosures, land acquisition, and much more.

If you are looking for lenders that offer hard money, there are hundreds out there just waiting for you. To find them, you can ask mortgage companies and ask them to refer you to a hard money lender. In addition, you can also ask help from real state agents or title companies. There’s also the Internet that you can check by just running a search for hard money lenders.