Private Money Loans or "Hard Money" loans, as they are sometimes referred, are mortgage loans that are offered by private lenders or individuals rather than the traditional financial institutions, such as banks or credit unions.  Borrowers who do not qualify for mortgages through banks often look to private money loans as an option.  Borrowers who have bad credit, insufficient income or income that is difficult to verify, non-conventional properties as well as any other factors that are considered undesirable to financial institutions may need to consider a Private Money loan.  Property conditions may also play a role in why banks categorize these borrowers as high risk as well.

Because the private lender is taking on this additional risk, private money loans have typically higher interest rates and fees than traditional mortgages obtained through a bank.  The interest rates on private money loans can be twice as high as (or even higher) than loans available through traditional mortgage lenders.  Again, this is often due to the fact that either these borrowers or their collateral properties are considered much higher-risk candidates.  But obtaining a private money loan can be a great option for someone whose other financing options are greatly restricted or non-existent.

Advantages of Fortune Bancorp's Private Money loans include:

• Loan Amounts to $10M

• LTV's up to 65%

• Interest Only payments

• Low, Short-term or even No pre-payment penalties

• Stated Income documentation available

• Bad credit not a factor

• Fast funding sometimes in as quick as one week

Private Money Loan Guidelines

Although each loan scenario will offer our investors unique underwriting considerations, our private money loan guidelines are fairly straight forward.  We focus mainly on the current/As-Is value of the collateral property.  Typically we will lend up to 50% to 60% of that collateral value depending on the type of property, strength of the borrowers and other compensating factors.

We have our own private investors for whom we underwrite and also work with a multitude of other reliable hard money lenders throughout the state of California primarily focusing on residential and commercial scenarios. We have loaned on, and still do consider on a case-by-case basis, land and construction scenarios as well.  We specialize in the Southern California area, and often times have additional flexibility for loans on properties in Orange County and the immediate surrounding areas.  In some cases these areas can allow for higher loan to value ratios.

We can also offer private money loans in other select states nationwide for most income-producing properties.  Please contact us directly to discuss any out of state transactions.

Whether looking for an apartment, commercial, residential, land, construction and/or a development loan - Contact Us Today to discuss your particular scenario!

Essential issues to be discussed upfront:

• Location and Character of the subject property.

• “Story” behind why the borrowers need this new loan.

• Current Status and “As-Is” Value of the property and/or project.

• Basic info on the Principals/Guarantors in the transaction.

• Exit Strategy (A realistic/detailed description of how the loan will be paid off at maturity)

Learn more, visit our Private Money Blog!