What is Private Money?
Related Information: Loan Types & Scenarios - Loan Requirements

About Private Money Loans

Private money loans are equity-based mortgage loans made by individual real estate investors, and secured by a Trust Deed against the subject property. These types of loans are referred to by many different names, such as private equity, hard money, or equity only mortgage loans. Alliance Financial Inc. specializes in funding private money loans from an established network of private investors. We can loan monies on a wide variety of loan scenarios and property types: residential, commercial, and land.

Benefits of Private Money Loans

Speed of Closing and Simple Application Process
Conventional mortgages, with their stringent and detailed processes, usually take between 45 days and 90 days to fund. On the other hand, Alliance Financial can make a decision on loan approval in 24-48 hours, and complete the entire transaction within 7-10 days. Since the property itself is the main criteria used to determine loan eligibility, and private individuals make the loans, many of the usual credit and income underwriting guidelines required by banks or institutional lenders for traditional mortgage loans are not required, producing a much simpler and quicker loan approval and funding process. Loans made by Alliance Financial also usually have lower appraisal fees, as well as little or no environmental, engineering and legal fees, resulting in lower closing costs.

Borrower Credit Not an Issue
For the "credit-challenged" borrower, private money loans are easier to qualify for. Banks require minimum credit scores, minimum debt ratios, a minimum amount of trade lines and a certain amount of credit history to approve you for a mortgage loan - private equity lenders do not. You can have credit scores below 500 and still qualify for a private money loan provided there's sufficient equity in the property being loaned against. Likewise, you can have little or no credit history and also qualify for this type of financing. Borrowers who may be temporarily credit or cash flow impaired, or who cannot document income, employment or assets can qualify.

Property Type Not an Issue
The property itself may not support the type of loan the borrower wants. In many cases the property type, zoning, location, vacancy rate, condition, or loan size doesn't currently fit the institutional lenders requirements. Many institutional lenders will not loan amounts under $500,000 and will not subordinate even if there is significant equity in the property. Alliance Financial loans nearly any amount of money on a wide variety of property types and loan scenarios.

May Be Able to Borrow More
Since private mortgage lenders base loans on the appraised value of the property, the borrower may be able to borrow more and therefore have less of the borrowers own capital invested in the property. In these instances, the borrower is not penalized for purchasing a property at a significant discount to market value.

Alliance Financial is Your Solution

Alliance Financial offers personalized service, speed and simplicity. We take the headache out of borrowing. Many borrowers and developers, both small and large, use Alliance Financial because of our ease and speed. Instead of jumping through the hoops of a bank or institution, you meet with us in an informal, stress free environment. We will discuss your needs and propose realistic and efficient solutions.

Many private money Borrowers could borrow institutionally but find the simplicity, ease and speed of borrowing from Alliance Financial fits their requirements better.

To have Alliance review your loan scenario, please complete our Loan Assessment Form.

If you have any questions or comments, please feel free to contact us.