What is hard money lending?
Hard money lending is a form of asset-based financing where the lender will be secured from the value of a property's equity. Interest rates are generally higher when compared to conventional financial institution loans. Hard money lending is typically funded by private investors.
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How do I pre-qualify for a hard money loan with PacFunding?
PacFunding makes pre-qualification simple for all applicants. We would like to encourage you first to give us a call at (858) 625-6701 to discuss your loan scenario with one of our originators. They will then advise you on how to best structure a loan for you based on the information you provide them. Please submit an application from our website and send us your information by either faxing it to (858) 625-9243 or emailing inquiry@pacfundingllc.com. After a thorough review of your submission, we will give you a call to discuss in more detail any additional conditions to meet the requirements of closing your loan.
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What does PacFunding look for when pre-qualifying a loan application?
PacFunding looks at the equity in your property first. From there, we can determine exactly what the lending limits will be, based on your ability to repay, debt-ratio, proof of funds for reserves (for purchase transactions), and your long-term goals with the property.
PacFunding will help advise you on what you need to understand about your loan (interest rate, terms, minimum interest, recourse, cost, title issues, etc.), and how your decision can help towards the investment on your property.
We will primarily review the collateral to the loan. However, we also review your ability to repay, credit-to-debt ratio, cash reserves, and your experience level.
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How long does the loan process take from pre-qualification to funding?
PacFunding does its best to make sure your loan closes in as little as 5 to 10 business days. This would also include appraisal report orders, open/order Escrow and Title Insurance. On occasion when the borrower or the property have liens, judgments, and/or title issues, we require that these items be satisfied first (or can be satisfied upon close of escrow) during the loan process.
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Do I need to provide all my documentation regarding income, bills, etc.?
This can depend on a few factors but typically you will only need to provide minimum documentation to obtain the loan.
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What if we have bad credit, are in bankruptcy, or are in the process of foreclosure - will this prevent me from getting a loan with PacFunding?
No. PacFunding would still be able to fund your loan despite your being in a tight financial situation. We will work with you to structure a beneficial loan that would be beneficial without overburdening you on your ability to repay. We are here to assist and make sure you are within your comfort level.
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Will PacFunding be able to close my loan if the property has tax liens and judgments?
PacFunding requires that all tax liens and judgments be paid off at loan closing.  Any such outstanding financial obligations will be thoroughly discussed with the borrower upon receipt of the preliminary title report.
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What is the approval and closing process?

a)    Loan Application Submittal by Borrower
      -  Borrower completes loan application with credit application including personal
      -  and property details.
      -  Borrower signs authorization forms, which allows PacFunding to research credit  
      -  history

b)    Screening by PacFunding
      -  PacFunding will review the Borrower’s goals and ability to repay the loan.
      -  Ensure the Borrower has a significant equity position in the real property, along
      -  with an exit strategy.
      -  If the Borrower is qualified to make the loan payments, and the underlying -
      -  asset has the required equity, PacFunding will submit a term sheet.
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c)    Term Sheet sent to the Borrower
      -  Borrower must agree to basic terms in order to receive full application package.

d)    Application package, Due Diligence Request and Disclosures sent to
     - Borrower

e)    Underwriting Process
      -  Detailed valuation analysis of the property
      -  In depth review of due diligence provided by the Borrower
      -  Open Title and Escrow
      -  A preliminary title report is created to determine what judgments or liens may  
      -  exist against the Property or Borrower

f)    Order Appraisal
      -  The borrower pays for a property appraisal by a certified appraiser
      -  Once the appraisal is completed, the loan to value/cost test will be reviewed

g)    Final Term Sheet to Borrower

h)    Issue Loan Documents to Borrower and Escrow Company

i )    Funding of loan
      -  Prepare escrow and wire instructions, and send to the title company
      -  Review loan documents for accuracy and completeness
      -  Release funds

j)    Transfer Loan to Servicing Company

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What are the fees involved and does PacFunding require these fees to be paid up front?
PacFunding fees include: origination, underwriting and/or processing, and loan document preparation. There will also be 3rd party fees involved for escrow, title insurance, appraisal report (residential only typically), credit reports, etc. Fees will be disclosed to borrowers before a loan commitment is made.  There are no up-front fees for an initial submittal. However, if we do require an evaluation to be made by a certified appraiser, the borrower will be required to pay this up front.
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What types of loans do you fund?
All of our loans must be secured by real estate and are for business purpose only (i.e. purchase of investment property for commercial or residential, cash-out for a business you own, pay off business related debt, etc.).  
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What type of loans do you not do?
PacFunding DOES NOT MAKE personal (“consumer”) loans such as loans to pay off personal debt, to purchase a primary residence, funds to go on vacation or to pay tuition for a child, to fund student loans, car loans, unsecured loans, etc.
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Why would anyone need a Hard Money loan when other conventional lenders charge lower interest rates and fees?
There are numerous reasons why individuals opt to choose hard money/bridge lenders over less expensive conventional lenders. Most of the time, certain borrowers or properties cannot meet the compliance requirements of conventional lender's financing guidelines that typically adhere to state and federal depository standards. Another reason is hard money lenders close loans more promptly as compared to conventional lenders. Under certain conditions, PacFunding can fund loans as quickly as 5 to 10 business days.  Conventional lenders can take more than 30-45 days for residential properties, and 90-120 days for commercial properties. The prompt loan closings from PacFunding has helped numerous clients use their funds for capital acquisitions, property development, foreclosure bailouts, bankruptcy discharges, probate resolutions and loans to administrator/executor of an estate in probate.
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Are most private investors/hard money lenders trying to foreclose on your investment to get the property?
No. Private investors / hard money lenders simply want a good return on their investment but they will protect themselves from losing the investment by using the equity in the property. This is a common misconception, private investors / hard money lenders just want the payments made on time but if the borrower is having difficulty they will insure that it will not be a long term problem.
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