[ad_1]
Hard money loan refers to financing provided by non-institutional lenders. There are many moneylenders who offer fast funding at attractive interest rates.
As the borrower, you will need to do a thorough check on the reputation and business of the lender, but as you do your research, you may find that hard money lenders can make a big difference in your quest to fund your real estate investment project. can provide benefits.
Benefits of Hard Money Loan
-
Fast Approval: Without a doubt, one of the major advantages of hard money loans is the fact that investors can secure pre-approval within a day or two, provided they have submitted the documents requested by the lender. Hard money lenders primarily focus on whether the property has a good market value and the borrower’s equity is at least 20%. Financing can happen in less than a week, compared to a normal loan that can take a month or so. When inquiring about hard money lenders, an important question is how quickly they can fund.
-
Flexible Repayments: With a private lender, you will have more freedom to create a customized repayment plan. You will not have this freedom with a large financial institution. Instead, you have to accept the payment terms set by the bank. However, with a private lender, you can discuss and come to a mutually agreeable repayment plan that you feel is suitable for you.
-
Low Requirements: When applying for a loan from a typical financial institution, you will be expected to meet a number of stringent requirements such as income history, experience, etc. It’s no secret that bank approval can be a cumbersome process. It is likely that you will not be burdened with so many requirements by a difficult moneylender. As long as you have a high-value property with at least 20% equity stake, there are good chances that you will qualify for the loan.
-
Zero prepayment penalty: If you avail the loan from an established bank, you may be subject to prepayment penalty if you pay the loan before the maturity date. Most fix and flip lenders do not charge prepayment penalties, so if you come across extra cash and decide to pay off your loan before the due date, you can do so with confidence without worrying about getting penalized for the same .
-
Credit history not a big issue: In case of major lending institutions, your credit history can have a huge impact on whether you will get a loan or not. With private lenders, there is less emphasis on a weak credit history. This is because a private lender sanctions the loan on the value of the property, borrower’s equity etc. As long as you meet these criteria, you have a good chance of getting funded.
An added bonus of getting a loan from a hard money lender is that as more properties in the community are renovated, property values tend to increase and the quality of the neighborhood improves.
[ad_2]