Hard Money Lending is a Great
Hard Money Lending. The perfect Alternative to Banks
If you are seeking financing for your real estate transaction, consider hard money loans. Hard money loans are based on the equity in real estate and do not require personal qualifying from the borrower seeking to obtain the loan. Hard money loans are based on the property and not the borrower. Another advantage to hard money loans is that they can be approved and funded very quickly. This is very convenient because most banks and mortgage companies can take up to 30 days to fund a real estate loan transaction. Most hard money lenders can fund a real estate transaction in less than 10 business days.
Hard Money Loans and Investors
Hard money loans are frequently used by investors as a form of funding their real estate transactions. Investors specialize in purchasing the property under market and then hiring contractors to repair these properties so that they can be sold for a profit. These transactions are known as “fix and flip” real estate transactions. Although these types of transactions are mainly done by real estate investors, anyone can “fix and flip” a property for profit. This can be done in any state and in any market.
Hard Money Lending Limits
Hard money lenders will usually lend up to 75% of the current value of your property. They will also provide funding to upgrade the property through rehabilitation also if needed. The homeowner is usually required to start the rehabilitation and upgrading of the property, and then the hard money lender will allow a draw of funds needed to complete the upgrades as needed. The hard money lender will continue to allow the homeowner to use funds for upgrades until the property has been fully remodeled and brought to acceptable rehabilitation standards. Once this is done, the homeowner or investor can now place the property on the market to sell to another buyer.
Hard money lending is very Affordable
Hard money loans are a little more expensive than a conventional mortgage or bank loans but are still very affordable. They do not cost very much compared to the amount of profit that can be made once the property is resold on the market to a new buyer. The points and fees are low and the funds are available in a very short time.
Most hard money loans are provided by private funds and therefore are not restricted by traditional bank or mortgage guidelines. They are usually provided by private investors or a group of investors who use their private funds for these transactions. The loan fees vary according to the amount of the loan and can oftentimes be negotiated with the lender to facilitate the real estate transaction in whatever way is needed. The guidelines can be flexible due to the fact that the funds are being provided by private money lenders and investors.