Hard money may be a new normal,
according to an article published in Scotsman Guide this month.
While some banks are lending to small business owners with pristine credit, many commercial property owners have had to seek financing elsewhere – hard money lenders.
If you’re interested in working with hard money borrowers, it’s important to note that being able to adapt to the differences in interest rates and appraisal costs are the first steps for the broker to take in becoming successful. While these borrowers will not obtain the lower rates and fixed terms that bank loans boast, there are some advantages for both commercial and residential brokers willing to secure them a commercial hard money mortgage.
It’s an under-served market.
There are plenty of borrowers looking to obtain commercial financing who would benefit from a hard money loan, but don’t know where to start. Brokers who embrace the hard money mortgage market and guide clients through the lending process are going to benefit and earn more income.
There’s less competition.
Both the traditional commercial and residential mortgage markets are filled with competitive brokers, making it difficult to secure customers and close loans. There are fewer brokers working with hard money clients, making this an easier market to break into.
There’s less regulation.
Unlike the commercial and residential mortgage markets, the hard money market is not heavily regulated. This makes is easier to get deals done and secure the fees you want.
The loans close quickly.
Hard money loans don’t face the same regulation that bank loans do, so these deals can close quickly. Because of this, your borrower is more likely to get the mortgage they need in a short timeframe, and you won’t lose as many deals.
The commercial mortgage market has changed since the recession, and that change includes more hard money lending. Embracing this change allows brokers to work within an underserved market with less competition. There’s less regulation impeding these deals, and they close quickly. Working with borrowers who need these hard money deals is a great way to expand your product offerings, close more loans and increase your income.
For more information on APEX Mortgage Corp.’s softer hard money program, call 877-603-5496 or view our educational webinar.