When it comes to hard money loans, you might wonder if there are differences between commercial and residential projects. In truth, they differ in several ways, particularly in terms of collateral, loan-to-value ratios, and interest rates.
Understanding these differences can help you choose the right loan for your project. John Pribble, CEO of DFW Hardmoney said: “Whether it's a commercial or residential project we offer distinct plans tailored to suit your needs”.
You should be prepared to navigate these financing options. Making informed decisions can significantly impact the success of your project. Always remember, that the quality of your real estate investment often dictates the terms of your hard money loan.
A hard money loan uses real estate as collateral for quick cash. Typically, it is not from a bank but from a private entity.
When choosing a lender, consider their rates, options, and customer service. Always aim for a good lending experience.
Hard money loans are preferred as an alternative funding source, primarily by real estate investors, developers, and flippers.
They originate from non-traditional lenders, the primary reason behind them being termed as 'last resort' or interim loans.
These loans offer rapid capital acquisition but at a higher expense, making them unique compared to traditional financial institutions.
Mechanisms Applications
Used in real estate transactions Favored by property flippers
Sourced from non-bank entities Rapid approval process within ten business days
Emphasizes collateral over financial status Suitable for short-term real estate investments
Negotiable terms between lender & borrower Funds range from six to 18 months
Selecting a hard-money lender requires careful evaluations of factors like interest rates, loan options, accessibility, and quality of customer service.
Hard money loans are unique forms of lending used mostly in real estate transactions. It's a favourite option for investors and those with equity in properties.
These loans don't follow the traditional route. Private lenders or investment groups issue them instead of commercial banks. The approval depends more on the equity in the property than on your credit history.
The key characteristics of hard money loans include being short-term loans that typically last several months to a few years.
You're primarily granted approval for these loans based on the equity in your property, which is used as collateral.
Your credit history isn't a significant deciding factor. Moreover, these loans often have higher fees and interest rates compared to standard commercial loans.
Yes, there are. For one, hard money loans are subject to financing contingency, while all-cash offers are not.
An appraisal is usually required for hard money loans but not for all-cash deals. Furthermore, hard money loans tend to be more expensive due to higher interest rates and fees.
Your interest rates on hard money loans may vary. This depends on numerous factors, like your credit history. An experienced borrower may receive lower rates.
Having a strong relationship with your lender can help. This bond could influence your interest rate positively. However, adding this factor could also add complexity to the process.
Besides interest rates, lenders also charge points. You might be required to pay these upfront or appended to your loan balance.
Evaluating these factors helps you make decisions. Your knowledge of hard money loans will be enhanced. Better understanding leads to a rich user experience.
Obtaining reliable and concise resources is crucial. This aids in enhancing efficiency while checking their options. A well-informed decision provides tailored solutions to user needs.
Hard money lenders, essentially, provide funds for short-term real estate investments. They differ from other banking companies in your journey.
Your loan approval happens faster with a hard money lender compared to traditional banks.
Making your real estate purchase or renovation achievable is their primary role in providing these loans.
Hard money loans can be a feasible financing solution. The type that suits you best - commercial or residential - depends on your specific needs.
Residential hard money loans are often used when traditional mortgage lenders won't provide financing. This happens typically due to issues with the borrower's credit history.
On the other hand, commercial hard money loans can be a lifeline for businesses. Especially for those desiring to acquire properties quickly without meeting traditional lending criteria.
Critical differences lie in the purpose of each loan and whom they serve. They have unique terms and requirements adjusting to individual business or homeowner needs.
If you're exploring hard money lenders, a reputable source to check is Forbes' list, which includes trusted institutions such as Easy Street Capital and RCN Capital.
Your choice of lender matters as much as comparing rates. The one with a lower rate may not always be ideal.
Last but not least, remember the importance of a clearly defined exit strategy in repaying your loan.
Your assets, like specialized equipment or industry-specific inventories, might be challenging to sell.
These assets could present problems if your business requires swift funds or if you aim to diversify your collateral.
Asset-based lending can provide access to capital but typically has higher interest rates and costs than conventional bank loans.
This is due to the increased risk for the lender as their focus is more on your collateral than your credibility.
Loan brokers can help by choosing the right lender for you based on your assets.
They prioritize accounts receivables as primary collateral, followed by commercial real estate, equipment, and inventory.
Hard money loans provide immediate cash but usually have high interest rates, short terms, and sizable origination fees.
This makes them unsuitable for those needing long-term funds or applying the loans towards low-margin or long-horizon business endeavors.
Bridge loans are short-term financing commonly used in real estate transactions and can be an alternative to hard money loans.
The existing property's value forms the base for purchasing a new building.
Property improvement loans permit property owners to finance maintenance and upgrades using the future value of the property.
This kind of loan could result in a higher resale price or better rental prices.
Hard money loans typically carry higher interest rates because the decision is based on collateral, not your credibility.
There's also a significant foreclosure risk associated with these loans.
In comparing commercial and residential projects, you'll find notable differences with hard money loans. Your choice should depend on your unique project needs.
Commercial loans often have higher interest rates and stricter terms, while residential loans are usually more flexible. Ensure you understand these distinctions to make informed decisions.
For insights into future financial trends, familiarize yourself with funding in the retail sector. This could help guide your project's financing strategies.
When you travel abroad this year make sure you don’t forget your GHIC and make sure it is updated
You are also recommended to take out travel insurance separately as this covers you for other predicaments such as having your luggage lost or stolen.
Global Health Insurance Card.
The GHIC is a great way for UK residents to have access to healthcare and treatment whilst on holiday. This is the updated version of the European health insurance card (EHIC) which you will now have to update since leaving the EU. The cards last for 5 years and you can update the card from 9 months before the expiry date.
With the GHIC you will be able to receive necessary healthcare on the same basis as a local resident of that country. This applies to all countries in the European Economic Area (EEA) as well as a few others.
Having access to healthcare on the basis as a local resident does still mean you could have to pay, the same as a local would have to in that specific country. Research if your destination is covered and what payments would be necessary there.
If you do not take your updated card with you then you will not be able to access necessary healthcare if you need it.
The EEA includes most European countries such as, Austria, Czech Republic, Spain, France, Greece, Italy, Germany and more.
The card will also cover you in a few outside of the EEA including Montenegro, Australia, Jersey. Guernsey, Isle of Man, St Helena, Tristan and Ascension.
Good news today as the inflation rate remains steady at 2% - the Bank of England’s target. The Office of National Statistics reported the forecasts from economists had placed the inflation rate at 1.9%, which unfortunately has not been met.
The Bank of England was hoping for service inflation to be down to 5.1% however, this remains at 5.7%.
The so called, Taylor Swift effect could be causing hotel prices to be up by 9.8% up from 7% as her Eras Tour makes it’s way around the UK. With summer starting, the season of concerts and getaways begins causing hotel prices to increase.
The Bank of England next meet every 6 weeks to discuss any changes and decide on the base rate. They will meet next on the 1st August.
Many hope they will drop the base rate from it’s current 5.25% however with several sectors remaining high this could be unlikely.
Aldi was nominated as the UK’s cheapest supermarket with the average price of a weekly shop costing £118.41 for 65 items compared to £151.01 in Waitrose.
The cheapest way to shop has been suggested as shopping in multiple supermarkets to find the best deals and to use loyalty cards too.
Make sure you are shopping effectively to help your money go further.
Aldi skips branded items providing low cost items which have little difference to the original. Many other supermarkets have taken on an ‘Aldi price match’ where you can find your favourites for the same cost as Aldi’s. Skipping the premium brands means skipping the marketing fees too delivering their customers with a weekly shop for less.
A close second cheapest UK supermarket is Lidl with very little difference in price between most items. So this is another great option if you have a Lidl near you rather than an Aldi.
The average price for a shop of 65 items came to £121.31.
The third cheapest was Tesco in the survey done by Which. This shop was conducted with the use of a Tesco Clubcard so make sure to sign up if you shop here.
The average price for a shop for 65 items came to £130.90.
For 174 items shopping with a Clubcard at Tesco was the cheapest costing, £439.58.
Asda came in as the fourth cheapest only just being beaten by Asda.
The average price for a shop for 65 items came to £131.42.
For a large grocery shop Asda came in second with an average price of £442.12 for 174 items.
It may not come as a surprise that Waitrose ranked as the most expensive UK supermarket.
The average price for a shop for 65 items came to £151.01.
Car insurance is a nuisance each time it comes around and many people have experienced increasing prices. Insurance policies take many factors into account so if you are a young driver or have had previous claims then unfortunately your insurance may be more than others. However there are a few ways you can help the cost come down.
The UK economy experiences a boost over each Euros season and this year is no different. We have seen a £3.1 billion boost to the economy over the past month.
Retailers received a £280.1 million boost which came mostly from supermarkets. Fans making extra food and drink purchases for each game.
Asda reported selling 20,000 large screen, ultra-high definition TVs before the final game and expected a rise again over the weekend.
Fans eager to watch the game on a bigger and better TV hosting watching parties which gives the supermarket a great boost.
17 million people were watching the final in a pub, bar or restaurant.
At least £405m was spent in pubs and supermarkets for the final. In pubs, restaurant and bars there was a predicted £70.5m spent on drinks and £54.3m spent on food.
Global Data figures shows an extra 10 million pints were poured during the final fame with a suggested 50% sales boost in pubs and bars.
The Government’s target for all new cars and vans to have zero emissions at the tail pipe by 2035 is why by the end of June 2024 there were 1,145,000 fully electric cars in the UK.
Having an electric car is much better for the environment but is it better for your wallet?
Buying an electric car is still more expensive than buying a petrol car making it difficult for many to make the switch.
Charging an electric car with an at home port costs on average £15.10 for 200 miles. This is added on to your overall energy bills.
Filling your car with petrol costs on average around £100 for 200-400 miles.
Electric have the disadvantage for needing to be charged more often as they don’t make long distances. They are much better suited to short drives and city driving. Despite charging being cheaper this takes a lot longer than filling up a petrol car as even a rapid charger as they have on motorways takes around 30 minutes and costs on average £26.
Road tax price is dependent on the CO2 emissions from the car.
On average road tax for a petrol car costs between £30-2,265 with the more expensive cars being charged more for tax.
Hybrid cars cost on average £0-135 for road tax.
And Finally, fully electric cars cost £0 for road tax due to their environmental advantages.
The Independent reports that those with electric cars pay almost over double for insurance than those with petrol cars, an average of £1,344.
On average, those with petrol cars pay £924 for insurance.
This is due to the cost of repairs and the materials needed for electric cars. Batteries for electric cars are also hard to fix and the parts are hard to find. There are also fewer mechanics trained on electric cars however with the rise in popularity this should change. Finally, there are a higher number of claims on electric cars causing insurance policies to increase the price.
Pod point reveals that on average it costs £528 less to run an electric car than a petrol car.
Data shows that electric car owners save on filling the tank as they avoid the cost of petrol. Additionally, maintaining and servicing an electric car can often be a lower cost too.
If you are unhappy with your current energy provider for any reason whether that is the price or customer service then you could think about switching.
It is recommended to keep an eye on deals from energy providers so you can find the cheapest deal for your home. Use comparison site such as, Money Supermarket or Uswitch to find the best deals.
It typically take 5 days to switch providers so timing is key.
If you pay direct to the supplier then you have the right to switch providers, even when renting. If you are on a fixed deal you will have to wait until the end of the deal to switch or pay exit fees.
You can choose between having a fixed term or variable deal with your energy provider.
With a fixed term your price will be set from the beginning, the price will depend on the energy provider as well as the Ofgem price cap at the time you sign the deal. This price won’t change for you even if the price cap does. If you want to switch but you are on a fixed term them you will have exit fees to pay unless you manage the switch at least 49 days before the end of the deal.
With a variable deal the price of your energy will change with inflation, as Ofgem changes the price cap and as the energy provider changes their prices. This could mean your price could decreases as this July Ofgem had lowered their price cap for providers to match. Your bills can also go up as the price cap is set to rise before the winter months.
If you are struggling to pay your energy bills then contact your provider. There are lots of ways to cut down your energy usage which can reduce the cost each month. You can ask your provider for a smart meter and learn how to use it efficiently.
Don't put it off if you want to switch energy providers.
At the beginning of July Ofgem announced a price drop for energy bills, however this is not set to last for the long haul. Unfortunately, energy prices are set to increase again before the winter months.
So, you may be looking for ways to reduce your energy bills?
There are lots of ways to do this at home by becoming creative and proactive, one way is to have a smart meter installed so you can track your energy usage efficiently.
You could save money with a smart meter if you use it to its full potential.
The government have set a target for smart meters to be installed in 74.5% of homes and 69% of small businesses by the end of 2025. Many homes already have a smart meter but if not your energy supplier should offer to install one soon.
If you want one sooner, you can call them up to inquire about having one installed which they will do free of charge and should explain to you how it works too.
You can have a smart meter even if you are renting or on a pre-payment plan.
Having a smart meter has a lot of benefits if used correctly not only to save you money but also to reduce energy usage which helps the environment too.
Ofwat’s 2024 price review indicates a price limit of a 21% increase between 2025-2030. This will be £21 extra per year over this period for households.
The increase in bills is to allow water companies to repair their mismanagement and sewage disaster. In 2023, Friends of the Earth found 68,481 incidents of sewage released into England’s seas. Water companies are polluting all seas, lake and rivers through faulty pumps as well as their management to divert the water rather than utilising treatment plants which costs the companies money.
This shocking act against their customers has gone without heavy punishment and now water bills are set to increase too.
Ofwat sets the limit of how much water companies are allowed to raise their bills for customers. Increasing water bills should mean cleaner water, you would think, however, Water companies report that the latest limit of a 21% increase over the next 5 years will not be enough to cover the repairs and stop the polluting of England’s waters.
The proposed increase is a third less than the amount requested by water firms, which have argued companies must be able to charge more in order to spend money on fixing leaks.
The BBC report that Ofwat are also proposing a ban on director bonuses until leaks and sewage spills are dealt with. This comes from critics calling out the water companies for prioritising bonuses and shareholder dividends over investment into the quality of work.
The water company, Thames water which cover London and Thames valley consisting of over 16 million customers is in debt £15.2 billion.
If the company does not manage this they might be bought by the government to keep the water supply running to its customers.
Their £1.8 billion funding should keep it going until May 2025.
Ofwat review the water companies every 5 years to ensure companies are charging customers fairly for their services taking into account any expenses needed for the water companies.
If a company does not meet their targets they face penalties, for 2024-2025 companies will be paying £114 million in penalties. This money is invested into the HM treasury.
Your water supplier will depend on your location, unfortunately there is no choice in which water company you can have.
At the beginning of 2024 the average water bill was £448 a year which would be £37.30 a month.
The most expensive water supplier is Wessex Water with an average monthly bill of £42.
If you have a water metre then the company will usually take a reading every 6 months and bill you for the amount used. If not they will base it off of the price of their unit rate and the average usage of water for the size of your property and area. This means without a water metre your bill will be less accurate to your specific usage.
BBC reported that 1.8 million people are now in debt of over £50,000 due to student finance. For most this is the only way for a further education and a necessity for career paths. It is important that once you have graduated you keep an eye on your loan to make sure the repayments happen at the correct time so that you are not losing out on money.
The earliest you will begin paying your loan back is the April after you finish your studies if you took part in a full time course. If you completed a part time or a postgraduate doctoral course longer than 4 years you won’t start repaying until 4 years after you finish. This gives graduates time to be in full time work after their courses end.
You shouldn’t worry too much about repayments as these only happen once you reach the threshold specific to your type of loan, the lowest threshold is £24,990 annual income.
Once you reach the threshold the money will taken from your bank directly.
This is another reason you need to check your account in case of any errors from the student loans company.
You can choose to start paying early, making voluntary payments but make sure your financial situation is secure before doing this as you won’t be given a refund on these.
The interest rate on student loans is between 6.25% and 7.9%.
This increases your repayment amount each year.
When you begin paying student loan you should meet all of the criteria above including you annual salary being above the threshold. If you have made payments before meeting the criteria then get in contact with the student loans company to claim a refund on this.
This often happens if your monthly income meets the threshold due to varying shift work, commission or bonuses despite this not continuing throughout the year.
Unfortunately, the system is not smooth sailing and this is where students come into problems with the student loan company. During your studies it is best to keep a close eye on your student loans, make sure the amount you are owed adds up to what comes into your bank account and that they have your loan amount correct too.
If the loans company pays you too much during your studies, you will have to pay this back. This is why checking at the time ensures this won't be a bigger problem later on. They will eventually notify you that you now owe them this money back which you can pay off in one or set up a payment plan. To avoid paying this once you have left university and potentially have other financial responsibilities, stay on top of your loan.
Wimbledon Tennis Championships is here again, the two week prestigious sporting event creating a buzz as always.
We take a look a look at how much money goes into creating the most prestigious tennis event in the world.
Obtaining a ticket for Wimbledon is not an easy task, their method to provide a fair ticketing system through a public ballot means there is a chance you will go without. You are placed in a draw where you will be pulled out fairly for any match or day during the two week event. You are usually notified in the November before the event, so if you are interested in next year get prepared.
Alternatively, Wimbledon is one of the few major sporting events to sell tickets on the day of matches. The queue will often begin the evening before and increase through the day, of course the closer you are to the front the higher your chances are. This year Wimbledon are encouraging those in the queue to download the Wimbledon app and create an account. This allows them to be checked into the queue, given a number and keep updated on the day.
Ticket prices range for each court and the day of the match. At the beginning of the event, day one tickets for centre court were prices at £90 however for the final day tickets for this court are £275.
Tickets for grounds passes are set to be £20 for Sunday matches.
Players at Wimbledon are in with a chance of winning large and this increases each year. In 1968 for the first Wimbledon event the total prize money came to a total of £26,150 which includes those in all categories.
This year the prize money will come to £50,000,000 which includes the £2.7m given to the each of the winners in the women’s and men’s singles matches.
Wimbledon generate their revenue mainly from selling broadcasting and media rights to TV operators and networks. In 2022, media rights were reportedly upwards of £175m which will increase each year as views increase. In 2023, the BBC streaming sites received 54.3 million people watching.
Tickets, merchandise and concessions is also a huge party of making money as in 2023 they had 532,651 guests watching the matches.
As the most prestigious tennis tournament in the world there is no doubt that the revenue created from sponsorships is also a large contributor. Wimbledon typically has 17 deals with large brands which benefit from exposure to large groups of people, setting their placement and some even have their own lounges inviting guests to their luxury spaces at Wimbledon.
One of their longest standing sponsors is Rolex taking the title of Wimbledon’s Official Timekeeper since 1978.
Other sponsors include, Slazenger, Ralph Lauren, Evian, Lavazza, American Express and more.
