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Private money lending refers to loans collateralized by real estate, with the decision to make a loan based primarily upon the protective equity in the property. To a lesser extent, the borrower's credit history is also considered.
Private money loans are needed when a borrower and/or a property fall outside the underwriting guidelines of conventional sources such as banks, life insurance companies, and conduits. The primary credit decision of those types of lenders is based upon the borrower's credit and income. Therefore, a loan may be a prudent transaction from a lending perspective, but is classified as subprime, thereby, needing private money.
Why Borrowers Select Point Center
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