Private Money FAQ.
How private lending works.
What is a private mortgage or “hard money” loan?
When should I use a private mortgage (hard money) loan?
Private mortgage loans are very normal in four common scenarios:
(1) If the purchase needs to happen very quickly.
(2) If the loan is only needed for a short period of time.
(3) If the property is somehow impaired.
(4) If the borrower has credit issues.
Given the above conditions, securing a private loan can be stressful. Sometimes, you only have a week to close or have a property in disrepair. Due to less qualifying requirements and accelerated closing timelines, private lenders generally charge higher interest rates on average compared to a traditional, slow-moving bank loan.
What are the advantages of using a private (hard money) loan?
What kind of credit score do I need to obtain a loan?
You do not need strong credit in order to obtain a loan. While borrower credit is still important, we are more concerned with the value of the real estate and the character of the borrower. We look at the situation, and make decisions based on real life, not on computer-generated reports.
What makes Capital Bridge different from other hard money lenders?
What kind of real estate does Capital Bridge loan against?
We lend to all types of real estate with an emphasis on properties in Northern California. We do tend to avoid owner-occupied single family homes and non-profit organizations.
How long does it take to close a loan?
5-7 business days.
What is the average interest rate of your loans?
7.99% - 12%
Why would someone borrow from a private lender knowing they would pay higher rates and fees?
Why is credit not as important to you?
We’re different from traditional other financial institutions lenders. Specifically, the money used to make our loans comes from ourselves and our investors, not the federal government. We only lend in the markets where we live and work. We use our time to understand your transaction, rather than pushing paper to check if you fit a very specific box. Likewise, we use our time to understand you and your goals, and therefore the credit report is much less important.
What does Capital Bridge look at when determining a loan?
We look at several key factors when evaluating a potential investment. The most important element is the ratio of the loan amount to the value of the real estate being pledged as security (the loan-to-value ratio, or LTV). Next, we favor mainstream real property in metropolitan areas where there is a resale market. We use our time to understand the borrower, their goals, and the nature of the transaction.
Likewise, we collect the borrower’s credit and other particulars such as income and liquidity to determine the safety of the loan. While these bits of personal information and data help to evaluate the likely performance of the loan, they are not the determining criteria when making an investment decision.
Do you offer second loans?
Yes. However, we prefer first loans.
Do you lend on cannabis?
We do have extensive experience in lending to properties that have cannabis-related activities, but it is not our primary focus. Please contact us to discuss your specific scenario.
Will you lend on renovations, including renovation costs?
Yes! Our most common loans involve some level of renovations. We specialize in this product, and it's very common to provide funds for not only the purchase, but also the renovation costs.
Do you offer stated income or loans to people in bankruptcy?
Yes! Our primary criteria when evaluating a loan are (1) loan-to-value and (2) location. Further, we only make investments where the loan proceeds will be used for business purposes (and not personal expenses). Therefore, personal income is much less of a deciding factor. Further, we have extensive experience helping borrowers emerge from bankruptcy and find helping people in bankruptcy rewarding.
Some call it private money, others call it hard money. Find quick & clear answers to some of the most common questions surrounding private money lending.