Expert: Marina Lando - 12/6/2003

Question
Dear Marina,

How would you define HARD MONEY in the following context:

The value of the property securing the hard money loan, must exceed the loan amount.

Thank you,
Yuri

Answer
Dear Yuri:

Basically it says:

“The value of the property securing the (hard to place short- term (6 months – 2 years), fast) loan, must exceed the loan amount”

In plain English it means: The value of the property securing the loan you applied for, must be grater than loan amount you requested. HARD MONEY is just a hard to place short-term, fast loan type you applied for (terms of this loan vary with banks) to cover your immediate needs.

For example:
The property (real estate) value is: $100,000.
At different banks LTV (loan to value) is different – from 40% up to 90%.
It means that your loan could not exceed: $40,000 - $90,000

Sincerely,
Marina Lando
Commercial Loan Broker
Direct: 888-469-1505
Fax: 919-468-6459
mlando@blquest.biz or blquest@earthlink.net
www.blquest.biz