Hi All,
Do hard loans appear on your credit report as a debt obligation? Thanks!
Elissa
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Hi Joel, I think you mean no "hard money" loans from "hard money" lenders to individuals correct? As far as I know, banks are still lending to individuals under different laws and regulations. By the way, my companies own quite a bit of mortgage notes that were originated (by someone else) to individuals and some of these companies are not banks.
Looking forward to meeting you soon. I have been following your posts and I have been learning quite a bit. Alberto
Alberto, with all due respect...there are NO LOANS made to an individual period. Doing so will open the lender up to serious issues in the States of New Jersey, New York and PA.
Have a great night,
Joel
Great point Joel. A whole different set of laws applies when you are lending to an individual vs. when you are lending to a corporation.
Elissa,
Hard Money Loans are ONLY made to BUSINESSES or LLC's. There are NO PERSONAL LOANS made it is not legit!
We do over a $1 million/year this way.
ALL loans are recorded but not against you personally only against the borrowing entity and this must be either a business entity or it can be a single member LLC.
Does that help,
Joel
The rule of thumb that I would apply is as follows:
If the loan is issued by a bank it would most likely show on credit. HELOC's are normally issued by a bank, whereas a hard money is not. However, even for a hard money loan, the issuer might still pull credit, so that a credit inquiry would show up, but not the loan itself. When in doubt, ask the lender before they extend you credit or if you are also worried about credit inquiries, make sure you tell them to let you know before they pull your credit report early in the process.
Thank you for the information. I was curious as to whether or not it would show up if applying for a HELOC.
It is expensive to report to credit and there are a lot of compliance issues in doing so. The vast majority of hard money lenders probably do not report to the agencies. If you do not pay the loan and if the money lender sues and if they get a judgement that would most likely go on your credit.
I think it would depend on the lender.