On top of the rate you will have to pay loan fees, points and closing costs for a hard money loan.
If you have already tried conventional financing and forbearance as per Erins suggestions and if the lender(s) said no, Then Hard Money might be a "last ditch" solution.
Having disclosed some of the negatives, . I'd like to point out why some go ahead with hard money anyway.
1. Hard money lenders consider collateral to be more important in their lending decision than your capacity (proof of income) or character ( blemishes on your credit report) Hard Money lenders were the original subprime lenders, but at least they (mostly) disclosed the high interest cost upfront.
2, Hard money lenders can close quickly and get your money to you within days.
3. Your equity in your home is your chief qualification. The hard money lender will require a new or recent appraisal in most cases. Inflated equity valuation from the past does not mean Bo Diddly Squat. If your $150,000 equity is the equity you had in your property a years ago , it is equity no more.
So here is a possible scenario:
You believe you have $150,000 equity because your home was appraised at $315,000 when you refinanced a year ago, Another house on your block sold for $307,000 this summer (it had an extra 400 sq foot separate workshop on the lot)
You owe $165,000 plus late fees and past dues to the mortgage company. Because the RE market has been plummeting all year your house is only worth $250,000. ( There is a house on your block for sale at 242,500 and a smaller one at $219,900 (A bank repo) - .... You have lost almost half your equity.
Your current loan to value is about 66%. based on a $165,000 balance.
In order to clear the $30,000 that you need, you would probably need to borrow about $36,000 to pay loan fees and other fees related to obtaining the loan. That brings the debt load up over $200,000 which is 80% loan to value.
Most hard money lenders like to keep their loans below 75% loan to value.
That means you would have to find a loan broker who is willing to search for a hard to find loan for you.
The new combined loan to value (LTV) is at least 80%; your year old appraisal is kaput.. A new one has to be ordered. It is very possible that the value may come in at less than my theoretical $250,000.
Remember the repo on your block at $219,900 and the other house at $242,500?
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I will ask her to call you, or you can email me for her number. .
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There are a lot of blanks to be filled in with your story, the best advice I can give is to sit down with a lender and see what solutions are available. If you are old enough you may want to check out a reverse mortgage option, it is not for everyone but another option to explore.
Hard money lenders tend to be a short term solution with high cost, so if your current income stream can't handle your current mortgage, it would be tough to handle a high interest loan, for example $150000 loan at 5% is a payment just over $800/mo where the same amount at 12% is over $1500/mo and that is a best case in terms of amortization (30yrs)
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My only comment is to Tricia--If you need the extra money to stave off foreclosure how are you going to pay BACK the loans you wish? The essence and definition of "predatory lending" is making a loan to someone when you know they can't possibly pay it back. If you wish to stay in your home talk to a Bankruptcy attorney and maybe seek out Chapter 13, Wage Earner's BK.
Also, contact your lender and see what you can arrange through them.
If you have not already, you should speak directly to your mortgage company, as they may have some options to assist you in stopping the foreclosure process. Not sure how far behind you may be in your payments, but they can set up a "forebearance" where you pay a little extra each month while you catch up on your payments...I have also heard of lenders adding the amount you are behind to the principle balance of your loan. Also, in California specifically, the state has arranged for some assistance programs with lenders such as Countrywide, Litton Loan Servicing, GMAC, and Home Eq.
Much luck to you.