A hard money loan refer on the financing which is provided by a non-institutional lender. There actually are many hard money lenders who actually offers fast funding through attractive interest rates. As a borrower, you need to perform thorough checks when it comes to the reputation of the lender as well as the business, but if you do your research, you actually will find that hard money lenders could give you different advantages for funding real estate investment project.
Some of the benefits that can be obtained from it are as follows:
One of the benefits that can be acquired from residential construction loan is the fact that investors are able to secure a pre-approval within just one or two days if they have submitted the necessary documents which the lender has requested. The hard money lender have a focus whether the asset comes with good market value and borrower equity for at least 20%. The financing actually takes place for only less than a week than normal loans which usually takes a month or probably more.
Payments are Flexible
Through private lenders, you are able to have more freedom on creating customized repayment plans. Through a big financial institution, you don’t have such freedom, but you need to accept the payment terms which the bank has set. With a private lenders, you can actually discuss with them as well as end up with mutually agreeable repayment plans which you find suitable for you. Learn how does a fix and flip loan work here!
Prepayment Penalties are Non
If you will acquire a loan from an established bank, you will be subjected towards prepayment penalties when paying off the loan before the maturation date. Most of the fix and flip lenders does not charge prepayment penalties, so when you ever come across extra cash and decides in paying off the loan before its due date, you will be confident do it without having to worry of being penalized.
No Problem with Credit History
With regards to big lending institutions, credit history actually has a big impact when you are going to get a loan or not. Through private lenders, there is less emphasis placed for weak credit history. This is simply for the reason that private lenders usually put their basis of loan approval on borrower equity, property value, etc. This is as long as you could meet the criteria, you have a good chance of getting the funds. You can also click this website for more facts about loans, go to https://en.wikipedia.org/wiki/Loan.
An added benefit of getting loans from hard money lenders is that there are more properties renovated in the community and that property values are seen to rise and improving quality of the neighborhood.
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