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Hard money lender vs. subprime lender?

What is the difference between a hard-money lender and a subprime lender? by IRFitk_121_727 from Sherman, Connecticut. Aug 2nd 2012 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

Sub Prime lending doesn't exist anymore.. It was a conventional loan for borrowers with bad credit.. Hard money is a loan where the equity position is the most important.. They will look at the asset and its value and it's use, how much $$ you have into it.. What kind of income can the asset produce, and do you have the ability to pay the payments.. Most hard money lenders don't lend on primary residence properties.. the government has strict rules regarding the fees charged to homeowners... if you buy an investment property, those rules don't apply, so for that reason the hard money guy can charge you much more to do your loan if it's not your primary residence.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Aug 2nd 2012
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Shaun batin (loanleaders)
#572 ranked lender in California - 8 contributions

Subprime is pretty much gone since 2007 the crash of the mortgage market. Subprime was good for bad credit better rates than Hard Money and higher Loan to Value on your home. If you have bad credit the only way to get a loan is with a Hard Money Lender. If you have at least a 600 Credit score you could possibly go FHA.ThanksShaun

Aug 2nd 2012
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Jesse Olson (jesseolson)
#657 ranked lender in California - 37 contributions

Hello, the major difference is in the qualification process. Sub-prime borrower means you are still trying to qualify for a conventional loan but you have less than perfect credit. Now-a-days, really the only sub-prime loans would be considered FHA because those loans are easier to qualify for. Where as, Hard Money is a short term loan (6 months), which the loan is given to you from a private company who has completely different qualifying standards...Such as, maybe they don't look at your credit profile as much as say how much equity the property has. Please feel free to contact me with further explanation or questions at jolson@afnmortgagelenders.com or 949.491.8607.

Aug 2nd 2012
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Peter Botros (PeterBotros)
#70 ranked lender in New York - 895 contributions

sub prime is gone. hard money is very high interest loans mainly conserned with the ability to repay and equity in the property

Aug 2nd 2012
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Travis Torcoletti (travis.torcoletti)
#0 ranked lender in South Carolina - 372 contributions

No sub prime lenders anymore which is good because those were loans for people with bad or no credit and who were getting bent over with pawn shop-like interest rates and you saw the results of that from 2007-2010 as the default rates on those loans were astonomical. Hard money lenders are short-term lenders who almost never lend against owner occupied residential housing and have higher rates. Not sure what you need the loan for but one doesn't exist (unless you count FHA as a sub prime lender but that's another story) and the other isn't an option for OO residential.

Aug 2nd 2012
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