How to Find the Longest Terms for a Hard Money LoanWhile hard money loans are short term loans backed by real estate, they do not conform to any set rule like conventional mortgages do. The typical term ranges from a few months to six years with the maximum usually ten years. However, the term of the loan depends solely on the individual or organization providing the funding for the project. These terms can vary greatly among hard money lenders in New Jersey, so it’s important to obtain information from several sources.

Searching for Hard Money Lenders

In order to find the longest terms for hard money lenders, investors must first take the time to find hard money lenders. The most logical place to begin is the personal banker who handles the investor’s business accounts, especially if this is a small, independent bank rather than part of a corporate conglomerate. Smaller banks are in a better position to approve hard money loans because the decision makers are usually right in the local area rather than in another state—or even in some cases, country. This option is not usually available for new and inexperienced investors since the bank will usually want an investor that can show at least two years of experience or at bare minimum, a substantial amount of funds on deposit in a time deposit account.

Those investors that are unable to locate small, independent banks to finance their purchases of investment property may need to conduct research to find organizations and wealthy individuals that are willing to finance their project. There are many New Jersey hard money lenders interested in finding place to invest their money in short-term real estate projects that will provide a high return on investment (ROI).

Finding the Right Loan Terms

Because hard money loans are not bound by any conventional rules, investors are in a somewhat fortunate position where they can negotiate with potential lenders. Certainly this does not mean you have the final say, but you do have more “wiggle” room for negotiation than is possible with traditional financing. For instance, if you are seeking to finance an apartment complex, a traditional bank may have a maximum mortgage term of 30 years; however, a hard money lender in New Jersey may be open to extending the usual term they offer for hard money loans if they feel your project is likely to provide a substantial amount of return.

Finding the right hard money lender is the key to finding the longest terms for hard money loans. In fact, your quest is likely to be more successful if you work with a group of investors rather than just an individual. When investors are able to group together in such a way that no one individual puts up too much cash, there is a better chance of success even for the investor. Whenever there is a high chance of profits for hard money lenders, the better the chances are they will increase the loan tem in order to accommodate the needs of the borrower.