Hard Money lenders and Credit Scores - Posted by Mark

Posted by David Krulac on July 24, 2008 at 05:39:20:

I’ve seen rates of 15% + 5 pts, 14% + 6 pts and 12% + 5 pts. The last HML the term was 12 months and the interest rate DOUBLED if not paid off in 12 months to 24%.

Hard Money lenders and Credit Scores - Posted by Mark

Posted by Mark on July 23, 2008 at 18:18:46:


Do hard money lenders pay a lot of attention to the credit scores of the person requesting a loan, or is that something they look past if they are brought a good deal? In other words, does a good deal trump a less than average credit score? Thank you.

FICO important to some, not all, lenders - Posted by John Merchant

Posted by John Merchant on July 28, 2008 at 08:39:49:

Some of our HM lenders study the FICO very carefully and want only better scores.

Yet others just want plenty of equity in the security property and aren’t fussy about borrower having great FICO.

Re: Hard Money lenders and Credit Scores - Posted by DJ-nyc

Posted by DJ-nyc on July 24, 2008 at 08:35:38:

It used to be the “deal” no matter what your credit was etc.; but these days the Investor who takes out a hard money loan gets “stuck” by not being able to Refinance or Sell. So nowadays they want to make sure the Investor can atleast “refinance” by checking income, credit, etc…

sign of the times…

My opinion is if the deal is ‘that good’ they will still find a way, Afterall a Hard money Lender is really an INVESTOR.


Re: Hard Money lenders and Credit Scores - Posted by Kristine-CA

Posted by Kristine-CA on July 23, 2008 at 20:28:04:

What I call “true hard money” lenders are lenders who analyze the deal
in terms of value of the property vs. loan amount of loan, period. It’s
not really hard money, IMO, if credit scores, income, etc. come into

That being said, there are hard money lenders out there who charge
the same high rates (16-18% plus points) AND want to lessen their risk
by looking at the borrower’s ability to repay (credit scores and income).

You’ll know the real hard money lenders by their advertising: bad
credit, no income ok! Kristine

Re: FICO important to some, not all, lenders - Posted by michaela-CA

Posted by michaela-CA on July 28, 2008 at 09:02:16:

Technically, a HML should only look at the asset. But I think geography might also have something to do with it.

I saw a lot of changes in Atlanta over the years. With the local REIA becoming the largest in the country (+3000 members) that brought with it every guru coming for seminars, because they always found enough ‘fools’ to buy the seminars. Not saying that seminars or courses are bad (just came back from an awesome one), but Atlanta had become a ‘hotbed’ for fraud and ‘let’s find the bigger fool’ deals.

With that it seems that the HML also became more structured and pretty much all looked at scores. I was able to borrow from a couple of people that had known me for years, but in general even those would only lend to someone else with good scores. I was not aware of anybody that didn’t look for good scores in that market. It seemed to be the norm, so nobody would come onto the market doing it ‘more risky’.

That was my observation.