A hard money refinance loan is a loan backed by a private investor or investment firm. Hard money loans are meant to be a shot term solution and as more Americans slide towards foreclosure they may be forced to turn to a hard money refinance to save their homes.
Refinancing with a hard money loan is a a good option for home owners that are facing foreclosure. These loans fund very fast and can save your home from being auctioned off. Refinancing with a hard money loan is also a good alternative for home owners that have a credit score that does not allow them to refinance with a conventional or Sub Prime lender The credit score cut off for Sub Prime lending is 500, after you dip below a 500 credit score your options are severely limited and a hard money loan is usually the only option left.
Interest rates for hard money loans are usually in the 10-18% range and will vary greatly from lending investor to lending investor. One of the things that stays generally consistent is the amount of equity needed in your home. Hard money lenders will in most cases only lend to 65%-70% of the homes appraised value, this of course will also vary with investors and your particular geographic area. Hard money lenders will charge points to the borrower, These points are another way a hard money lender makes their money. Average points for a residential loan is 5-7 points. 1 point is 1 percent of the loan amount, this can get quite expensive on larger more expensive homes.
While the interest rates and fees will be considerably higher then a conventional or sub prime loan a hard money refinance does offer credit troubled home owners a short term solution to save their homes or pay off debt.
Learn More about Hard Money Refinance and Sub Prime Loans
Educate your self with more then 1500 Mortgage and Real estate articles at http://www.mkemortgage.net
Article Source: http://EzineArticles.com/?expert=Darin_Sewell
