The Advantages of Considering Hard Money Loans
Hard money loans refer with the financing that is actually provided by the non-institutional lender. There actually are many hard money lenders who actually offers fast funding through attractive interest rates. As borrowers, you will have to perform thorough checks with the reputation of the lender and the business, but when you do your research, you will find that hard money lenders are able to give you various advantages in funding your real estate investment project.
Some of the benefits that can be obtained from it are as follows:
Fast Approvals
One benefit which could be obtained from hard money loans is on the fact that investors can secure pre-approvals in just one or two days when they submitted the needed documents that the lender requested. A hard money lender places their focus if the asset comes with good market value and borrower equity to at least 20%. Financing takes place only within just a week than the normal loans which takes a month or maybe more.
Flexible Payments
With the private lenders, you are able to have more freedom for creating customized repayment plans. By having a big financial institution, you will not have such freedom, but you will need to accept the payment terms that have been set by the bank. Through a private lender, you could discuss with them and end up with a mutually agreeable repayment plan which you think is suitable.
No Prepayment Penalties
If ever you get a loan from an established bank, you are going to be subjected to prepayment penalties if you will pay off the loan before its maturation date. Most fix and flip lenders does not really charge prepayment penalties, so when you are able to come across extra cash and decides in paying off the loan before its due date, you surely will be confident in doing it without worrying getting penalized for it.
Credit History is not a Problem
With regards to big lending institutions, credit history actually has a big impact with regards to getting a loan or not. Through the private lenders, there’s less emphasis which is placed on a weak credit history. This is due to the reason that private lenders put their basis of their loan approvals on property value, borrower equity, etc. This is as long as you are able to meet their criteria, you will have a good chance of getting funded.
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.