Hard money, yay or nay?

[Cesar Lopez]

I am currently in the process of buying two homes in Northern NJ and am financing through a hard money lender.  Is it custom to pay an application fee of close to $1000 per loan?  Are there any suggestions of lenders that do not charge the application fee?

[Mike Makkar]

@Cesar Lopez

I feel more and more people are using hard money is because it is much more marketed to the investment community than others. People fail to investigate other sources of money before going "hard". I know of people with reasonably good credit (720+) taking hard money, when they could've just gotten a signature loan from a 3 major banks at 6%.

So, my advise, look at the following

1. Community Bank or CU (You need good liquidity and financials here)

2. HELOC (You need enough equity on your primary residence here)

3. Refi your car (car has to be under 50k miles or newer than 2010, check with bank/CU)

4. Signature loans (need a reasonable Credit score (680+) and paystubs)

5. P2P loans - LendingClub or Prosper (little higher loans %, but they're non-recourse)

6. If all other options are exhausted, go "hard", :)