What Is a Hard Money Loan and How It Works?

A hard money loan refers to a type of loan. However, what makes it different from other types of loans is that it’s secured on real property. Moreover, they are considered short-term bridge or last resort loans. Basically, they are used in different real estate transactions. The lenders are either companies or individuals, not banks. Read on to know more.

Key Takeaways

Given below are some of the salient features of these loans.

Primarily, they are used for real estate transactions. And this money comes from a company or individual instead of a bank.
Typically, this type of loan is granted for a short period of time. The purpose is collect money quickly at a lower ration of LTV and higher cost.
Since these loans are not executed traditionally, the funding time is reduced is usually quite quick.
It’s interesting to note that the terms of these loans are negotiated between the borrower and the lender. Plus, these loans use the real estate as collateral.
Although repayment may result in default, they still leave a lot of profit for the lender.
How does a Hard Money Loan Work?
Usually, the terms of hard money loans are based on the value of the real estate, not the borrower’s creditworthiness. Since conventional lenders like banks are not the lenders, private lenders or firms are most interested in this business.

Also, these loans may be a good choice for property flippers who have plans to renovate a property and sell it again. Here you may be thinking the cost of this type of loan is quite high. But the good thing is that the extra cost is offset by the loan will be paid off rather quickly. In most cases, the loan is granted for a period of 1 to 3 years. Aside from this, they offer a lot of advantages as well.

Aside from this, this type of loan is considered a great investment as well. You can find a lot of people out there who have done this business and are happy with the practice.

Special Considerations

Typically, unlike the bank financing or the financing programs offered by government, the cost of these loans is quite higher for a typical buyer. However, this cost reflects the higher risk that the loan granter bears. But the great thing is that the extra cost is a worth it as the money is available quickly. The approval process is less stringent and the repayment schedule is also quite flexible.

Also, these loans can be a great choice to deal with turnaround situations. For instance, if you need money quickly for a short-term financing but you have poor credit score, you can give it a go. Since the amount is issued pretty quickly, you can use the funds to stave off a foreclosure, for instance.

Pros and Cons

Now, let’s take a look at some pros and cons of hard money loans.

Pros

First of all, the approval process is quite faster unlike the process of mortgage or a conventional loan. The thing is that private lenders are interested in this type of business as they can make decisions quickly without running a lot of checks. In other words, they won’t check your credit history. These are the steps that slow down the process and make the borrower wait for weeks.

Typically, these investors only care about the repayments. Plus, they have the opportunity to resell the property in case the borrower fails to make payments and becomes a defaulter.

Another advantage is that the lenders don’t apply the conventional underwriting process. Instead, they evaluate all of the cases one by one. Often, applicants can sit with the lender and discuss the repayment schedule based on their circumstances. Aside from this, borrowers can take advantage of a lot of opportunities during the time they have. So, this is another great advantage you can enjoy if you go for this option.

Cons

Since the real estate is used as a security against default, these loans feature lower LTV rations unlike the regular loans. This ration is between 50 and 70% unlike the ration of regular loans, which is 80%. However, if you are an experienced flipper, it can be even higher.

Aside from this, the interest rates of these loans are higher as well. For subprime loans, the rate of interest can be even higher. In 2019, for instance, the rates of hard money loans were between 7.5 and 15% based on the period the loan is granted for. By contrast, the prime interest rate was only 5.25% in the same period.

Another disadvantage is that these lenders may not offer loans against owner-occupied property because of compliance rules and regulatory oversight.

Hope, now you understand what hard money loans are and the pros and cons associated with them. For more information, you can consult your mortgage broker.

New Perceptions In Art Through Neuroscience Research

THE PERCEPTION OF ARTIf we go to an art gallery, we react to the artwork in many ways. We may feel mildly interested, quite interested, entranced, inspired. Or we might feel bored, disinterested, mildly disturbed, upset, aggravated or even, enraged. Without knowing about how to look at art, its history, or what is behind the meaning of what we are looking at, our reactions are subject to our own personal feelings. If we had taken an art appreciation class or studied about art history, we would have a different perception; a knowledge of how the art developed and where we could place it in the timeline of art development today.Art education– knowing art movements, timelines, developments, what motivated artists of the past personally and sociologically, will alter our perspectives and change the way we see art. For example, if we know nothing of Picasso, looking at one of his Cubist paintings may cause us shake our heads and walk away, perplexed. How could that chopped up vision of a human being be attractive and meaningful? But if we had read about Picasso during his Cubist period and knew that the colors he used were monochromatic and architectural for a reason, that Picasso was dealing with translating natural rounded forms to geometrical, flattened forms and that these images would inspire a new era of contemporary painting-then would we see Picasso’s Cubist paintings differently?Yes. For many of my Art Appreciation students, a paradigm shift and expansion of their skills of perception occurred. And in most cases, they learned how to enjoy art within a new context of understanding: a broader visual and historical, information-rich understanding.But now, there is additional knowledge in neuroscience that has shaken the foundation of these studies of Art Appreciation and Art History.A NEW ART APPRECIATIONVery recently, within the last decade, the perception of art has been studied by scientists and, especially, neuroscientists, that look at how neurons in our brains respond to various stimuli, including the visual, and especially, art.These studies are just surfacing to the public through various publications, and altering our ideas of how we perceive art. Those of use who were linked to their own personal perceptions of art, as well as those (like me) who have studied and taught the subjects of Art History and Art Appreciation, have been altered indelibly by these new neuroscience studies.Is this research making Art Appreciation and Art History so very different? Yes. From a neuroscientist’s point of view, we are, indeed, hard wired in our brains for seeing things in a certain way and the art we have manufactured for thousands of years, has been gauged to our neural response to the images we have created.The ultimate realization of this new neuroscience research is that the global art market has its roots in this understanding-not that anyone selling art since the Jurassic has gauged their sales on neuroscience, but has been inadvertently in line with the knowledge that some visual images appeal more than others. How many other global markets can begin to equate and calculate their sales according to this new technology?WHAT IS NEUROAESTHETICS?A new and interesting science is developing in the perception of art why we like what we see, and how the art market responds to our visual desires. Neuroaesthetics, is a new definition of perception which V.S. Ramachandran, a noted neuroscientist, writes about in his recent book, “The Tell-Tale Brain,” As a scientist researching many areas of neuroscience, he says, “Science tells us we are merely beasts, but we don’t feel like that. We feel like angels trapped inside the bodies of beasts, forever craving transcendence.” And he adds, this is the human predicament in a nutshell. He responds to our need for a higher being and sees that our ancient profile as human beings gives evidence to this.Ramachandran offers a new perception on what makes art, why we like what we see and what the art market uses to develop the value of artistic work. He establishes a premise that looks at how we see art in a new way. Through his research in brain-response situations, he has developed a profile of how and why art is attractive to us.WHAT ARE MIRROR NEURONS?Mirror neurons in our human brains are unique in that we can empathsize (feel the way they do) with our fellow humans in a way that animals or any other species can’t. In the development of our brains over thousands of years, we have become aware of not only ourselves as an image we keep in our brains (the knowledge and image of self) but also how we can manufacture a trail of history, make our own personal data album and autobiography that we can play back for our reference to relive tender memories, anxious moments, challenging situations, and terrible, sad events. Because we are knowing our own selves, we can record our personal histories in great detail in our brains and use these historical memories as resources for our development (or demise, if we get depressed or chronically affected by our negative past.)A NEW PERCEPTION OF ARTV.S. Ramachandran’s research and creation of neuroaesthetics has entered the world of Art History and Art Appreciation and is changing the perspective of art history.. Prior to his studies, art historical research, which became the study and research of Art History, was established in the early 19th century. A profile and timeline of art development was developed which gave credible history to the development of painting, and sculpture basically in the Western world.These studies gave a picture to the academic community of the development of art from the cave paintings to contemporary art in Europe and America. In the American academic world, Art History 101, the child of Art History development and has been the prime educational subject on the history of art until the present.THE GLOBAL COMMUNITYThis Art History outline presently taught in most academic environments, rich with documentation, often has a narrow view of historical creative endeavor in that it is not global and so to meet the needs of a rapidly expanding world, the study of Art History has to be updated to include many the creative cultures of many other civilizations including Africa, Indonesia, Asia, China, Russia and beyond.The view from the science community echoes an interest and need for many areas of study to go ahead into the future. What studies in neuroscience define for us is our global link as humans hard wired to see our creative development in a new and different way. For all of our accumulated wealth in the sciences, the link to other cultural resources has been a detriment to our development as a nation and a global linking with other cultures. Science has always had its strengths in objectivity, observation and empirical judgment. Within an ever-expanding world of knowledge, it is necessary for every source of research to spread unrestricted into other sources so that the total spectrum of knowledge will be enriched and therefore, benefit the global community.

Business Advertisement

Business advertisement brings profits in sales. The key goal of such advertising is to convince the potential buyers to purchase manufactured goods and services. There are various avenues through which the customers get information about the true marketable products and services. These are television, radio, newspaper, magazine and recently online advertisement. The truly marketable product brand has now brought forth a novel integrated tactic that proves rewarding. The maintaining and cultivating the strategy by using the right tools at the right moment and in the right place is extremely necessary. The actual aim of the advertisement is to make people aware of products and services accessible under the brand name rather than selling the product.Significance of AdvertisementProduct publishing plays an important role in creating brand awareness among the general public. The potential buyers are persuaded to reach out for the products. In addition, the satisfied buyers make verbal publicity among the neighbors, friends and relatives. This leads to the increase of profits of companies by increasing its revenue. The expenses of advertisement in turn get good height in earnings. The popular modes of publishing goods and services are newspapers, pamphlets, brochures, magazines, journals and books.Advertising in print media is comparatively cheaper than availing through electronic media. By using this, one can cover a wide range of audiences belong to different age groups. For example, if a brand name is advertised on television the brand would get access to every home and offices, and also in other public places. With time, advertising on the internet is getting more popular. The internet is the most workable platform available till date not only in case of an advertisement, but in case of sharing new and creating universal awareness by sending them to every corner of the world.What Advertising Agencies Do?Many of the firms advertise their products to the potential buyers through their own advertising department. But, others depend upon some advertising agencies for promoting their brands and services. Organizations pay to these agencies for promoting their brand name. They are always there for recommending, and making the most of your advertisement costs of promoting your brand name on the right place.Advertising, therefore, is proper promotion of the products, not selling of items. It helps to give proper information about the brand. On the other hand, it facilitates general people know about the products and to buy the advertised brands more consciously. So, advertising is the link between company and their customers. Advertising not only gives the proper awareness of the products but also offers a nice introduction of the company. Attractive advertisements create demand in the public mind that in turn boost sales of the brand.Online AdvertisingOnline publishing of products and services promote the products in the best way as it is not limited by time and space. The different kinds of advertising sites are available for promoting products. We can select them based on our needs. The different kinds of methods available are Pay Per Click, banner ads, text ads, intext adds, link ads, flash ads, slider adds, hovering adds, pop up ads, pop in to add etc. You can take up as per wish. Online advertising is very specific to the audience. The advertisers use keywords or phrases in their online ads that are employed by the potential buyers in order to search for the products and services. More is, the online ads are region specific also. Banner advertising is a popular form of online advertising. Advertiser can advertise their banner by coming to an arrangement with online companies and publish their banner. It is more cost effective than other forms of advertising. There is just one time start up cost of creating a website. There are no associated costs like postage, storage, repeated design fee etc.A study by Google confirms that nearly 30% of internet-users read newspaper and they are likely to go online to research at least one product that they find in a newspaper. Internet advertising when combine with newspaper advertising can help advertisers to reach to targeted audiences. Whatever may be the media, without advertisement, business owners experience a much harder time to orient the business field in their support.