A hard money loan is a short-term non-conforming loan secured by real property. Hard money loans offer several benefits. Securing a hard money loan is easier than a traditional loan, as most Northern California hard money lenders have relaxed underwriting standards. Thanks to the less stringent approval process, a person whose loan application was rejected by banks or other traditional financial institutions can still qualify for a hard money loan.
Though hard money lenders are more concerned about the total equity you have in the property than your creditworthiness, the following documents are necessary when applying for a hard money loan.
Application
Your loan application should include important information related to the collateral and your income. Clearly explain the purpose of the loan. You may also be required to disclose information about your financial plan and share other details, such as cash on hand and your credit history. The amount of information you are required to share with the lender primarily depends on the specifics of your loan.
Privacy Policy
Hard money lenders typically share a privacy policy document explaining how they intend to use the information provided by applicants.
Mortgage Loan Disclosure Statement
A mortgage loan disclosure statement describes the various details of the loan, including monthly payments, the repayment period, and the costs and fees associated with obtaining the loan.
Equal Credit Opportunity Act Notice
Federal law prohibits lenders from discriminating against borrowers based on sex, age, marital status, and religion. In addition, the Consumer Credit Protection Act mandates lenders to share a notice (explaining these requirements) with applicants.
Promissory Note
The promissory note is one of the most important documents required for a hard money loan. By signing a promissory note, you agree to pay EMIs on specific dates until the loan is paid in full. A promissory note also lists rules that the trustee – a third party entrusted with the responsibility of holding the property until the loan is paid in full, must follow.
Deed of Trust
A deed of trust allows the borrower and lender to bring in a third party to ensure both parties hold their end of the bargain. The third party or the trustee holds the property deed until the loan is paid in full. Once the loan is repaid, they hand over the document to the borrower.
Hazard Insurance Disclosure
Hazard insurance disclosure describes the borrower’s rights and responsibilities relating to maintaining property insurance for the property that is pledged as collateral.
Fair Lending Notice
A fair lending notice is an acknowledgment by the lender that they understand the fair lending laws and regulations and are willing to abide by them.
Altus Capital Group is a distinguished private money lender serving Northern California. Our unparalleled ability to customize loan solutions to meet the specific needs of borrowers sets us apart from other lenders in Northern California. To learn more, call (707) 932-5887.
