Hey All, Do hard money loans show up on your credit file? Would it be possible to get a hard money loan and use it as a deposit (20%) for a property, with the 80% loaned from NAB, Bank West, Liberty ect. Thanks, The Don
hard money loan = hot money lending= high interest and no security loan. The term comes from US Big Pocket forum. @TheDon Where did you find hard money loans in Australia?
You'd still need to prove genuine savings as part of the deposit so you wouldn't be able to use it for all the 20% What's the end game here? Loans like that are for the short term and have high interest rates due to being non secured loans. How will you pay it back?
I’ve just searched a few finance providers online. Mango Credit offer a few products that could potentially help.
Potentially, I recently checked a Credit file where we were refinancing a private loan to a mainstream and the private lender loan didn't show up. But if the loan is going go be a lmi deal, you'll have to make sure it satisfies Gen Savings if needed
I don't know of any hard money lenders out there, but if they have a credit licence then it is likely going to result in a credit check and be on your record. Mango dont appear to be offering hard money loans, they are secured loans it seems.
Thanks Terry, your feedback is always valuable. I will do more research in a few days and get back to you
We hold both an AFSL and ACL but don't normally undertake a Credit Search on any of our Private loans.
Refinance? Are you expecting to have saved the money during the term of the short loan so you'll be able to pay it out or relying on the property growing in value to refinance and pay back the money? Things to be wary of with these types of loans - the time/length of the loan and penalties. For example a 3mth loan might have a rate of 12% but if you don't close it/repay it at 3mths then the rate goes up to 18% - establishment fees - can be high and are generally up front. If you're struggling too raise a deposit then this might be hard together with the monthly repayments on the short term loan + standard mortgage repayments
Varies depending on the term and lvr and whether you can service the loan or not. A lot of our short-term bridging loans are done from a rate of 4.95%.