Avatar's Blog
» FICO Scores and Hard Money Loans
Hard money loans are based on the borrower's equity in real estate. The value of the real estate is established by an appraisal ordered by the hard money lender. (Here's an important tip! Do not order an appraisal on your own. The hard money lender must order the apprasial. If you order one on your own, you will only end up paying twice!)
While the loans are based on equity in real estate, Avatar Financial Group and other hard money lenders do pull your credit scores to take a look at your financial history. In most cases, it doesn't matter whether you had a bankruptcy or even if you are currently in bankruptcy. The hard money lender garners other information from your reports, such as the kinds of credit you have and have had, the credit limits, current obligations and more. If some of the loans on your credit report are loans that will be paid off by the proceeds of the loan, it might be expedient to note that in your application.
