Focus: Hard Money
Every month, Scotsman Guide zooms in on a particular industry
topic that is essential to the collective knowledge of residential
mortgage professionals. This month’s focus is on hard money.
Read past Scotsman Guide articles online for insight into various
strategies related to hard money.
Learn the pros and cons of hard money
lending to help small-builder clients
Vice president, SIC Funds
To many potential homebuyers, the idea of building a
home for their specific needs and desires sounds ideal.
The process of applying for, and closing on, a construction
loan for a single-family home, however, requires a much
greater commitment of time and financial resources
compared to financing an existing home. The primary
reason is simple. Banks prefer to lend on an existing
tangible asset. ❖ In prerecession days, small builders had
greater access to capital, but now they must frequently
put the onus on the buyer — and thus on mortgage
originators — to obtain construction financing. If that
buyer has poor credit or a credit-history glitch, the home
sale could be lost — along with the originator’s time,
effort and commission. ➨
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Articles and News
“Securing Cash for Construction,”
Search our archives, which go back to 2003, at sctsm.in/RESsearch
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