You Know This Terms When You Applying Hard Money Loans?

Yes, I can help you with the terms related to hard money loans. Hard money loans are short-term loans that are typically secured by real estate. Here are some key terms commonly associated with hard money loans:

1. Hard Money Lender: A private individual or company that provides hard money loans. They specialize in providing quick access to funds based on the value of the collateral property.

2. Collateral: The property or asset that is used as security for the hard money loan. If the borrower fails to repay the loan, the lender can seize the collateral to recoup their investment.

3. Loan-to-Value (LTV) Ratio: The ratio that expresses the loan amount as a percentage of the appraised value or purchase price of the property. Hard money lenders typically offer loans with higher LTV ratios compared to traditional lenders, but it can still vary depending on the lender and the property type.

4. Points: Hard money lenders often charge points, which are fees calculated as a percentage of the loan amount. Each point typically equals 1% of the loan amount. Points are paid upfront and are in addition to the interest rate charged on the loan.

5. Interest Rate: The rate at which the borrower is charged for borrowing the money. Hard money loans generally have higher interest rates compared to traditional bank loans due to the higher risk involved and the quick access to funds.

6. Loan Term: The duration of the loan. Hard money loans are typically short-term loans with terms ranging from a few months to a few years. The terms can vary based on the lender's policies and the specific loan agreement.

7. Loan Origination Fee: A fee charged by the hard money lender to cover the costs associated with processing and funding the loan. This fee is usually a percentage of the loan amount.

8. Prepayment Penalty: Some hard money loans may include a prepayment penalty, which is a fee charged if the borrower repays the loan before the agreed-upon maturity date. It's important to review the loan terms to understand if a prepayment penalty applies.

These are some of the common terms used in the context of hard money loans. It's crucial to carefully review the loan agreement and consult with a financial professional or attorney to fully understand the terms and conditions before proceeding with a hard money loan.