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What Is Hard Money? And When Is It Useful?

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Hard Money

Are you interested in understanding what hard money is and when it can be useful? Hard money is a type of financing that comes from private investors instead of banks or other traditional lenders. It is typically used when there are time constraints on securing a loan, and the borrower may not be able to meet the requirements for a bank loan, such as having good credit or collateral. This article will discuss hard money and when it can be used. Let’s get started.

What is Hard Money?

Hard money is a type of loan that is secured by real estate. It is typically secured by a first or second mortgage, or deed of trust, on the purchased property. The loan amount is usually much higher than traditional financing and carries higher interest rates and shorter repayment terms.

Hard money loans are generally used to purchase fixer-upper properties or investments with a higher risk of default, such as properties in rural areas or those with little to no liquid assets. For instance, you can find a top-rated Florida Hard Money Lender if you want to buy a house in the area to enjoy its beautiful beaches. These loans will come with an interest of 9.5 – 12.75% and can be approved in 5 minutes, enabling you to close on your project quickly.

When Is Hard Money Useful?

Hard money can be useful when you need to purchase property quickly and have time constraints. It also comes in handy when you don’t qualify for traditional financing or have difficulty with paperwork since hard money loans are approved without an extensive review of your credit profile or other factors.

Additionally, these loans can be used as bridge loans and help complete projects that may not be eligible for traditional financing. They can also be used to purchase commercial or investment properties with a higher risk of default.

Benefits of Using Hard Money

There are various benefits of using hard money loans. Here are the main ones:

  • Time: Hard money loans can be secured much faster than traditional mortgages. This is because they require less paperwork and a shorter processing time since the asset itself is used as collateral. You can get it in five minutes if you know where to look.
  • Flexibility: Hard money loans can be structured in various ways depending on the borrower’s needs. The lender may agree to different repayment options, longer loan terms or shorter maturities, and other creative financing solutions.
  • Credit Requirements: Because hard money is secured by an asset rather than a borrower’s financial history, it may be a viable option for those who have difficulty getting approved for traditional financing due to bad credit or lack of income.
  • No income verification: Hard money lenders don’t usually require income verification, so it’s a great option for those who are self-employed or have difficulty documenting their income. For instance, if you are self-employed and don’t have a traditional pay stub, you can still qualify for a loan.
  • Liquidity: Hard money loans can be used to generate quick cash by leveraging the borrower’s existing assets, such as real estate or business collateral.

Tips to Consider When Using Hard Money

Here are some tips to consider when using hard money:

  • Research Your Lender: Make sure you do your research and vet any potential lenders. Read reviews, ask for references, and ensure they have experience in the type of loan you’re looking for.
  • Know the Terms: Make sure you understand the terms of the loan, how long it is valid for, and any penalties that may be associated with it.
  • Secure a Lower Interest Rate: Negotiate with hard money lenders to obtain the best rate possible for your loan. You can also ask if they offer any special deals or discounts. Always read the fine print to avoid any hidden fees.
  • Be Aware of Repayment Terms: Understand the repayment terms and ensure you can meet them. Consider any additional costs that may be associated with the loan, such as closing costs or extra fees.
  • Have an Exit Strategy: Ensure an exit strategy before taking out a hard money loan. This helps you plan for future payments and ensures that you can repay the loan on time. For instance, you can use the loan to finance a project that will generate future income.

 Hard Money

Hard money loans are a great way to quickly secure financing when you don’t qualify for traditional mortgages. The process is faster and more flexible than traditional mortgages, and they often require less paperwork and no income verification. However, it’s important to research your lender carefully, understand the terms of the loan, negotiate a lower interest rate, and have a proper exit strategy in place. By following these tips, you can ensure that you make the most of your hard money loan and achieve your financial goals.

 

Economy

Trump’s victory sparks concerns over ripple effect on Canadian economy

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As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.

Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.

A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.

More than 77 per cent of Canadian exports go to the U.S.

Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.

“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.

“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”

American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.

It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.

“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.

“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”

A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.

Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.

“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.

Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.

With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”

“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.

“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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Economy

September merchandise trade deficit narrows to $1.3 billion: Statistics Canada

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OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.

The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.

Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.

Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.

Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.

In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.

This report by The Canadian Press was first published Nov. 5, 2024.

The Canadian Press. All rights reserved.

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Economy

How will the U.S. election impact the Canadian economy? – BNN Bloomberg

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How will the U.S. election impact the Canadian economy?  BNN Bloomberg

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