Question 1

What is a private mortgage or “hard money” loan?

Accepted Answer

A private mortgage is a loan that is secured by real estate.  It is very similar to a loan from a bank, except that the money used to fund the loan comes from a ‘private’ company.  Similar to a bank loan, the mortgage (AKA: loan) is secured by a deed of trust on real estate. The deed of trust is recorded in the county the property is located. The recording provides the public notice that the lender has an interest in the property. The mortgage, deed of trust, and recording are further insured by title insurance that assures the priority of the loan over other claims.

Question 2

When should I use a private mortgage (hard money) loan?

Accepted Answer

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.

Question 3

What are the advantages of using a private (hard money) loan?

Accepted Answer

Private loans offer borrowers a number of advantages over traditional financing, including a simpler application process and greater flexibility and customization.  Borrowers will opt for private loans over traditional banks in many instances, including when:    (1) The borrower needs to close quickly and needs a decision as soon as possible. We can provide approval within hours and close within a week.     (2) The loan is only needed for several months versus 30 years.   (3) The borrower has past credit issues. We have the ability to tailor loans to the borrower’s unique needs unlike banks which are encumbered by countless restrictions and guidelines.   (4) The property is not eligible for a bank loan given that it needs extensive rehabilitation. We can structure our loans to allow for rehab and non-stabilized property financing.

Question 4

What kind of credit score do I need to obtain a loan?

Accepted Answer

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.

Question 5

Why would someone borrow from a private lender knowing they would pay higher rates and fees?

Accepted Answer

Private money loans offer a number of advantages over traditional financing, including a simpler application process and less stringent credit and asset requirements.  Borrowers seek private loans for a number of reasons, including:   (1) The borrower is looking for a quick close. (2) The borrower only needs the funds for a short period of time. (3) The borrower has credit problems. (4) The borrower needs to pay judgments or federal or state tax liens. (5) The property needs repairs .

Question 6

What makes Capital Bridge different from other hard money lenders?

Accepted Answer

Reliability of close.  We are local. We know our markets, and we make decisions immediately and close quickly.

Question 7

What kind of real estate does Capital Bridge loan against?

Accepted Answer

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.

Question 8

How long does it take to close a loan?

Accepted Answer

5-7 business days.

Question 9

What is the average interest rate of your loans?

Accepted Answer

7.99% - 12%

Question 10

Why is credit not as important to you?

Accepted Answer

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.

Question 11

What does Capital Bridge look at when determining a loan?

Accepted Answer

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.

Question 12

Do you offer second loans?

Accepted Answer

Yes. However, we prefer first loans.

Question 13

Do you lend on cannabis?

Accepted Answer

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.

Question 14

Will you lend on renovations, including renovation costs?"

Accepted Answer

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.

Question 15

Do you offer stated income or loans to people in bankruptcy?

Accepted Answer

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.

Private Money FAQ.

How private lending works.

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