Hard Money LendersDo you need a loan to renovate a property?
Are you having a hard time securing a loan from traditional lenders? We can connect you to hard money lenders who will offer you fast loans to finance your property. Private lenders or private agencies grant hard money loans. These loans are backed by properties, and they are often offered by private companies.
Since they are always backed by collateral, the lender does not need to worry about your ability to pay the loan. Hard money loans have high interest rates and can be obtained easily. Traditional loans go through a slow process, and the borrower may not even get the loan at the end of the day. You will have to complete a pile of forms when you apply for a traditional loan. Even though the interest rates on conventional loans are low, you may not receive the funds in time for your project. Hard money lenders offer loans at the Loan-to-Value (LTV) ratio of the property that is securing the loan. This is the quick sale value of the property.
Hard money loans are beneficial for many real estate investors. Investors who benefit from this loan the most are the fix-and-flip investors and the buy-and-hold investors. Fix-and-flip investors obtain hard money loans to purchase the property, renovate it, and sell it at a high amount.
They usually analyze the properties to make sure that they will sell at a high price after renovation. Fix-and-flip investors obtain loans that amount to the after-repair-value of the property. This means the cash will be enough to fund both the purchase and the repair. When they sell the property, they pay the lender back.
Buy-and-hold investors, on the other hand, obtain hard money loans to purchase properties, renovate them, and then rent them out. The investor can then obtain a traditional mortgage using the renovated property. The investor will then use the conventional mortgage to pay off the hard money loan.
Do I qualify for this loan?
It is easier to qualify for hard money loans compared to traditional loans. You will need to provide certain basic information including a valid ID card, your bank account details, your social security details, and your contact information. You should also be a citizen of the United States, and you should be at least 18 years old.
The lender will also ask you to provide at least two months bank statements. You should also have a credit score of at least 550. The lender will also need information about the property you are going to purchase. The required information includes the location of the property as well as the price of the property. You should also have experience of successfully undertaking a similar project to qualify for the loan.
The process for applying for hard money is online. You will be required to submit your information through the online portal. The loan request form is easy to complete, and it does not consume a lot of time. Once you complete the form, the lenders will review your request and send you their quotes.
Here, you will know if you qualify for the loan through this process. You will know the amount lenders are willing to offer you, and then you can make your budget for the purchase of the home. You will also get to know the terms and conditions of various lenders, and the administration fees as well. You can also analyze the various lenders and their offers and choose the one that works best for you.
The next stage is the funding phase. This is where the lender will evaluate your past projects, documents, and run all background checks. They will also look at the purchase contract. When the lender is satisfied with you, they will fund your loan.
Interest Rates on Hard Money Loans
Hard money loans are expensive compared to traditional loans. The interest rates are high, but the good thing is that the lender will inform you about the interest rate before you proceed with the loan process.
Although the interest rates and fees vary, lenders charge between 7.5% and 12% as interest rates and 2 to 10 points as fees. The lender will discuss everything with you, and he or she will make sure you agree to the rates and fees before proceeding with the loan request. If you have any issues regarding the loan, you should talk to your lender.
When it comes to the repayment of loans, lenders are very strict. If you do not comply with the necessary policies, you will lose scope with our lenders. Your credit score may also reduce if you default on your loan.
Whether you took out the loan for a fix-and-flip project or a buy-and-hold project, the lender will set a repayment schedule. You should always keep due dates in mind so that you can repay the loan before that time. If you default on the loan continuously, the lender may take over the property. This is because the property is what secures the loan. This explains why hard money lenders concentrate on the property instead of your financial status. Some lenders will also penalize you by charging late fees for defaulting on your loan.
Why should I choose a hard money loan?
Many people wonder why there are still many people going in for hard money loans even though they are expensive. The best alternative to hard money loans is the traditional mortgage.
A traditional mortgage is granted by conventional banks. However, the conventional mortgage is not easily accessible and flexible. Borrowers who do not stand a chance of obtaining a conventional loan may get the chance to access a hard money loan. In the first place, hard money loans can be obtained faster and easier.
The requirements are not many, and you can easily provide those requirements. Unlike the traditional loan where you will need to complete a lot of documents even to begin the process. You can also begin the hard money lending process online, and you can get pre-approved in minutes. A traditional loan is different, and you are likely to visit the bank to begin the process.
You can also access a loan from private lenders even if you have a lower credit score. Even if you have a credit score of 550, you are eligible for a hard money loan. You will, however, need a credit score of at least 640 to qualify for a traditional mortgage.
If you are looking for a loan you can access in two weeks, then you should opt for a hard money loan. Traditional lenders take a longer time to fund your loan. Traditional lenders do not grant you loans if the property is not in good shape. However, hard money lenders grant you loans to renovate distressed properties. That means irrespective of the property; private lenders can still grant you loans.
Note to loan requester
We are not lenders; we connect you to a pool of lenders. Our lenders have their terms and conditions, and it is important to read their terms and conditions before proceeding with the loan request.
By applying on our website, you agree that we can share your information with our pool of lenders. Our lenders are the ones who will facilitate your loan and, they also make it a point to keep your data confidential. We encourage all borrowers to cooperate with our lenders to make the loan request process easy.
There are instances where lenders help you to qualify for the loan. For example, if you do not have any experience with a similar project, the lender will get a contractor who will help you to renovate the property. You will bear the fees. Borrowers should note that not all lenders provide this option.
We also want to inform all borrowers that even though our lenders grant loans to lots of borrowers, we do not guarantee that your loan will be granted. It will all depend on your eligibility. However, if you qualify, the lender will grant you the loan.
We also advise our borrowers that they should always use the loan for the intended purpose. That is the only way they can easily repay the loan. Real estate agents should also make a good analysis of the house they intend to purchase.
They should make sure that the property is a property that will sell fast after renovation. The duration of the intended renovation should also not exceed the loan repayment period. The location of the property is also important. To make a proper analysis, you should ask for the prices of similar renovated properties in the same area.