Have you ever heard about hard money loans? These are quick cash loans for real estate investors. Their other name is short-term bridge loans. Hard money lending is different from a traditional mortgage loan. When trying to apply for a loan from a conventional lender, a borrower must ensure:
• Sufficient equity in your property. A decision to lend money is mainly based on the value of the property
• Substantial down payment or 25 to 30%
• A means to pay back the loan every month
• Prior experience in the real estate industry
• A reasonable and transparent exit strategy.
Typical hard money lenders savannah, ga does not care about the following things when approving you for a loan:
• foreclosures or short sales you have had recently
• Recent bankruptcies
• Poor credit history
• The number of mortgage loans you own while a bank will not offer a loan without proof of four other mortgages
• Your lack of stable employment for the past two years
• Your self-employment status.
Important Points To Note
Before taking out a hard money loan, ensure that you understand it. To start, consider the following 6 points:
Point 1: A hard money loan is a short-term loan
Hard money lenders tend to take a considerable risk when offering their loans. Thus, they offer a shorter repayment period of between one to three years. It is unlike a typical mortgage lender who gives a payment term of between fifteen and thirty years.
Point 2: When you need money fast, hard money loans can be your best friend
These loans are the fastest path to securing an excellent real estate deal. The lender typically asks for a few things. These include the type of property being financed, the deposit you can afford personally, your equity in the property, the number of funds set aside for loan repayment, and the exit plan for the property. If you can prove that you meet the above requirements, the lender will approve the loan you want fast. And fast here means three to five days. It is a concise duration compared to a bank that can take more than a month to be approved.
Point 3: They suit property flipping better
A property flipper can use these hard money loans to acquire a cheap property, renovate it to boost its market value, and resell it for profit. The collateral in a case like this is the higher value of a renovated house.
Point 4: Bad credit rating does not matter. It is the property value that does
Your creditworthiness will not matter to a hard money lender. Even if you have recently filed for bankruptcy and don’t have the same financial strength you had before, you can get approved for a hard money loan.
Point 5: Hard money lenders are usually private companies or individuals.
As these lenders have pre-set clear goals and don’t fluctuate often, their lending process is unambiguous and enjoyable. These lenders have minimal paperwork as they do not need to verify income or review recent bank slips. If you borrow a hard loan for a second or third time, the approval will be instant.
Point 6: No rush when you default
Let’s say you fail to pay your monthly installment for the loan. The hard money lender will not give you endless calls and stress you, unlike the traditional mortgage lender. Instead, they will wait and see if you will continue defaulting. If you do, the same property you financed with their loan can be resold to recover unpaid loans.
As you search for a hard money lenders savannah, ga, consider their way of doing business. Even though hard money lending is convenient when you need money fast, not all lenders are trustworthy. BridgeWell Capital is one of the best options that you can trust and lean on. They are TRUE In-house Private Money Lenders who don’t care about your self-employment status, recent foreclosures, short sales, or bankruptcies. Even your bad credit rating cannot deter them.