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Patrick Hook, Broker-Associate

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Private money loans can be extremely helpful if you are in need of some immediate cash, but they can also be quite complicated. Just because they are complicated, however, doesn't mean that you shouldn't opt for private money loans. Hard money loans (another term for private money) can help brokers, investors, borrowers, and homebuyers alike, you just have to do a little research beforehand if you aren't exactly sure how the process works.

Here are a few commonly asked questions regarding hard money lenders and the dos and don'ts of the industry.

    1. Who typically issues hard money loans? -- Hard money loans are usually issued by private companies or investors.
    1. Are interest rates similar to other kinds of money loans? -- Hard money loans typically include higher interest rates compared to banks, but because of the immediacy, these loans are great for all kinds of borrowers, investors, and commercial and residential dealers. In addition, these loans usually have lower loan-to-value ratios, although it will not exceed 70% of the after-repaired-value, and typically start at an interest rate of 15%, 18%, or, in some rare circumstances, a little higher.
    1. How long does the hard money loan process usually last? -- Private loan providers investors access to capital very quickly so they can purchase lucrative investment properties. The process usually goes very fast, mostly within two to three days of receiving the final loan documents.
    1. How long will the loan be good for? -- It depends on the lending company, but the majority of hard money loans typically last between three months and one year. That's one of the benefits of these loans, too, because any longer of a loan would result in even higher interest rates, so it's best to get the money and invest as soon as possible.
  1. What kind of regulations exist in the private money loan market? -- Since the beginning of hard money lending, the U.S. has been fairly lackadaisical with its overseeing. The private money field has virtually been unregulated by both state and federal laws, although there have been a few restrictions in certain parts of the country (Tennessee and Arkansas).

If you want to learn more about private money loans or the entire hard money lending process, contact Maggio Capital today.

Contact Us

12526 High Bluff Drive, Suite #300
San Diego, CA 92130

Main Office:
832 Camino Del Mar, Suite #3
Del Mar, CA 92014

California Department of Real Estate
Real Estate Broker,
Broker License #01883341,
NMLS #308757

NMLS Consumer Access

Maggio Capital, Inc., is based in San Diego, California. We originate, underwrite and facilitate non-traditional mortgages on residential and commercial properties throughout California.

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