Otherwise known as a home equity conversion mortgage, or HECM, this unique product allows seniors to access equity in the form of cash payments or a line of credit, while continuing to remain in the home as their primary residence. Unlike the repayment terms of a traditional loan, the borrower does not make monthly payments at all, unless they no longer occupy the home or they become non-compliant with the required maintenance, tax, or insurance obligations.
Many consumers use financing to enable them to purchase homes. Lenders offer buyers mortgages with specific terms such as the period of the loan and the interest added to the balance. Before proceeding with any contracts, it's important to understand the process so you can protect yourself from potential fraud.
There are several reasons a person may which to refinance their loan with a mortgage company, however, this is not always the best solution. Customers must take a look at a few important questions to determine if a new loan provides the greatest benefit.
A) Most hard money loans are secured by a property with 30% -50% equity, so the investor is well protected. Much more protected than any investment with no collateral. aka: stocks and even bonds nowaday.
B) A hard money loan is a loan in which the borrower gets funds based on the value of a property as opposed to the traditional lending criteria that banks look for such as credit scores, tax returns, and income statements.