This type of loan doesn’t have as many restrictions as one might think considering that it’s just money, so no more having to worry about bankruptcies, foreclosures, collections, etc. “

FIXAND FLIP LOANS Fix and flip loans are also asset- based loans; however, they utilize more underwriting guidelines and criteria. While hard money loans focus solely on the asset, fix and flip loans look at both the asset and the borrower. The reason why people confuse hard money loans with fix and flip loans is because both the loan and the laws are very similar. They are both private money to an investment property. Virtually all fix and flip and hard money loans are funded by hedge funds; the money comes from the same place, but the underwriting is different. Contrary to hard money loans, fix and flip loans are usually sold on the secondary market and go through a full underwriting with tighter guide- lines. For instance, depending on the lender, fix and flip loans have a minimum FICO requirement. Addi - tionally, the borrower can’t have late payments, foreclosure, judgments, or bankruptcy on their credit for 24-36 months. Furthermore, a fix and flip loan is a rehab loan, a loan that you utilize to acquire a property and then receive the funds to rehab that property in short-term financing (12-18 months). Depending on whom you are

Michael Mikhail is the Founder and CEO of Stratton Equities, the nation’s leading direct hard money and NON-QM lender to real estate investors, with the largest variety of mortgage programs. For more information about Stratton Equities or to join our team, please visit www.strattonequities. com , call 1-800-962-6613, or email info@ ment for all private money loans. It is important the lending and real estate investing industries avoid blanketing terms that can cause confusion and a mislabeling of mort - gage programs. • working with, it is important to bring something dynamic to the table, to help you close your loans quickly, efficiently, and profession - ally. However, make sure that when you move forward with a mortgage lender that you know all the details of your loan, why they are utilizing that program, and whether that loan program is being properly present- ed to suit your needs. The biggest misconception bor - rowers have, is that many believe that you need a hard money loan at high interest rates even though you are a high credit score qualified borrower. The fact is you can receive interest rates and terms very close to conventional financing while still being a no-income verification loan. Hard money is not a blanketed state-

lean position because it’s just money. It is normally in the form of a bridge loan, which is short-term financing in a period of 12-24 months. One of the reasons why hard money loans are for investment properties ONLY, is due to the high-cost regula - tions and predatory lending. You can - not put such high interest rates and cost on an owner-occupied property. In certain states, there are non-ju - dicial foreclosure laws, which allow a Hard Money lender to get their money back quickly if the borrower defaults on the mortgage. These foreclosure laws make the lender more comfort - able doing high-risk loans; usually the money is not sold on the second - ary market—the lender holds the note—they do not sell the paper.

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