Frequently Asked Questions about Hard Money Lending

FAQs

877.700.3703

Frequently Asked Questions & Answers

1) What is Hard Money Lending?

- Hard Money Lending is a form of asset-based financing where the funds of the borrower will be secured from the value of a property's equity. Interest rates are generally higher compared to conventional loans issued by a financial institution. Hard Money Lending is mostly funded by private entities secured by notes to private investors.

2) How do I pre-qualify for a Hard Money Loan with PB Financial Group Corp.?

- PB Financial Group Corp. makes pre-qualification simple for all applicants. We would like to encourage you first to give us a call at (323) 935-5555 to discuss your loan scenario with one of our account executives. They will then advise you on how to best structure a loan for you based on the information you provide them. In turn, we then ask you to complete our loan application form and provide us with specific information on the subject property you wish to either purchase or obtain equity out of. Then send your information to us by either faxing it to (323) 935-5580 or emailing info@calhardmoney.com. After a thorough review of your submission, the account executive will then give you a call to discuss more in detail additional conditions to meet the requirements of closing your loan.

3) What does PB Financial Group Corp. look for when pre-qualifying a loan application?

- PB Financial Group Corp. looks first on the equity of your property. From there we can determine exactly on what the lending limits will be based on your ability to repay, debt-ratio, proof of funds for reserves (for purchase transactions), and your long-term goals with the property. Stated and No Doc programs are available for qualified investment properties and other non-owner occupied properties. PB Financial Group Corp. will help advise you on what you need to understand about your loan (Interest Rate, Terms, Prepayment Penalty, Cost, Title Issues, etc.), and how your decision can help towards the investment on your property.

4) How long does the loan process take from pre-qualification to funding?

- PB Financial Group Corp. does its best to make sure your loan closes in as little as 7 - 14 days. This would also include appraisal report orders, open/order Escrow and Title Insurance. On occasion when the borrower or the property have liens, judgments, and/or title issues, we require that these items be satisfied first (or can be satisfied upon close of escrow) during the loan process. However, such issues can prolong the loan process thus closing lapse past the 14 days. We encourage our clients to be prepared to provide conditions promptly to help expedite the closing of their loan.

5) What if we have bad credit, are in bankruptcy, or are in the process of foreclosures -will this hinder me for a loan with PB Financial Group Corp.?

- No. PB Financial Group Corp. would still be able to fund your loan despite being in a tight financial situation. Our account executives will work with you to structure a loan that would be beneficial on your part without overburdening you on your ability to repay. We're here to help and make sure you are within a comfort level.

6) Will PB Financial still be able to close my loan if the property has tax liens and judgments?

- PB Financial Group Corp. has closed numerous loan transactions with tax liens and judgments tied to the property. These are thoroughly discussed with the client once the Title Report is received and reviewed by our office. We advice that all Tax Liens and Judgments be paid off at closing.

7) What if the client is currently in a short sale, or currently in a foreclosure, or has had a previous foreclosure? Will the client be denied a loan?

- PB Financial Group Corp. will still be able to fund a loan even if the client or the property is a short sale, or currently in a foreclosure, or has had a previous foreclosure. We want to make sure that the property has enough equity to pay off the existing mortgage loan. This allows PB Financial Group Corp. to become the new and only mortgage note holder on the property.

8) What are the fees involved and does PB Financial Group Corp. require these fees to be paid up front?

- PB Financial Group Corp.'s fees are the usual standard and common lender fees: Origination, Underwriting and/or Processing, Inspection (in lieu of an Appraisal Report), and Loan Document Preparation. There will also be 3rd party fees involved like Escrow Closing, Title Insurance, Appraisal Report, Credit Report, etc. Our fees are always disclosed to our clients before a loan commitment is made. PB Financial Group Corp. does not require any up front fees to do our due diligence. However, if we do require an evaluation to be made by a certified appraiser, the borrower will be required to pay this up front. As long as the property has equity, the fees are generally paid from the loan proceeds at closing.

9) What are PB Financial Group Corp.'s rates, terms, and do your loans have prepayment penalties?

- As a Hard Money / Private Money Lender, rates with PB Financial Group Corp. ranges between 8.99% to 12.00% for Fully Amortized and Interest Only loans. Our loan terms also depend on the type of property our clients would like to lend against. Residential Loans typically have shorter terms, which go between 12 months to 10 years, while Commercial Loans can go between 3 months to 20 years. (Please look into our Program Highlights for more information). Since the loans are financed with private investor funds, prepayment penalty is a common requirement by our investors as a guaranteed interest return. Prepayment Penalty terms also vary depending on how your loan is structured. It is best to get in contact with a PB Financial Group Corp. Loan Officer at (323) 935-5555 to discuss your loan scenario for your rate, terms, and if your loan application will require a prepayment penalty.

10) Why would anyone need a Hard Money loan when other conventional lenders charge lower interest rates and fees?

- There are numerous reasons why individuals opt to choose hard money lenders over less expensive conventional lenders. Most of the time, certain borrowers or properties cannot meet the compliance requirements of conventional lender's financing guidelines. Another reason is Hard Money lenders close loans more promptly as compared to conventional lenders. Under certain conditions, PB Financial Group Corp. can fund loans as quickly as 24 hours that typically take within 2-weeks to fund. Conventional lenders can take more than 30-45 days for residential properties, and 90-120 days for commercial properties. The prompt loan closings of PB Financial Group Corp. has helped numerous clients use their funds for capital acquisitions, property development, foreclosure bailouts, debt-consolidation, bankruptcy discharges, probate resolutions and loans to administrator/executor of an estate in probate.