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Hard Money Loans*

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If you are in the market for a distressed property that you want to fix up, you may be looking at using hard money loans. In most cases, when you get a normal residential loan, the value of your property is going to remain the same while you own it, even if you make some adjustments here and there. When you are buying a distressed property, you are almost always going to improve the condition of it dramatically. That is why you are buying it to begin with. Some people are hesitant to use hard money loans because they seem scary and difficult to obtain. Here we will discuss why this is not the case.

The first thing to acknowledge is that hard money loans can actually be much easier to get than a regular loan. This is true for many reasons; but the hardest thing to do is actually estimate the value of the property after the corrections are made. Generally, a professional appraiser will be in charge of this aspect, so you do not need to worry about it. You definitely want to be aware of what the appraiser says, but you do not need to feel like getting this type of loan will require you to be completely aware of how much the property will be worth after you make the needed repairs.

Another thing that you should realize is that hard money loans are only offered by companies who are hard money lenders. These are generally not the same companies that offer commercial or residential lending. If you try to buy a distressed property from a company that is not specializing in hard money, then you are going to be paying much more, generally. That is because they are considering it a much higher risk to lend to you.

The hard money lenders are in their own niche market. They know what they are doing, and have usually been doing it for years. They have a system for figuring out how much you are going to pay, and as long as you feel confident that you will be able to make the repairs, you may be as good as gold. You can sell the property when you are done at a much higher price then you paid for it. As long as you know what you want to do, then this situation can work out very well for you. You will be far better off using a lender that specializes in this type of loan rather than a lender who usually offers normal loans but is working with a distressed property at the current time.

The main lesson here is that you do not need to be afraid of hard money or lenders that specialize in it. If you are in the market for a distressed property that you want to fix up and sell in the future, you should explore these options. Not only can these loans be easy to obtain, but they can also pay off for you very well in the end. Even if you are paying higher rates, these can all come back to you when you sell the property after fixing it.

Why Should Hard Money Loans be Considered?

If you are having trouble attaining a loan from a bank or mortgage for real estate investing, hard money loans might be the best loan for you. These types of loans come from private investors that are willing to lender their money at a higher interest rate to help people that have trouble attaining loans. There are a number of reasons why people are turned down for loans but most of the reasons are related to low credit ratings or having too many opened credit accounts. Lenders of hard money loans are a little bit more lenient than traditional banks and are more likely to approve you for a loan.When you receive any hard money loans, you will receive a loan that has higher interest rates than the standard financial institution’s loan. Because of your credit situation a private lender is taking a chance on someone who the banks passed over, so it makes sense to charge you more interest. What happens with a hard money loan is you will be required to put up your property as collateral if you default on the loan. Since in most cases the lender’s name will be first on the lien on your property, the lender will take possession of the property if you are unable to maintain your payments on the loan.For those that are planning to attain a hard money loan, you must know the loan amount will not exceed three-fourths the repair value of the home. If you’re into flipping houses, this is very important because you need to know how much money you will qualify for when buying houses and fixing them up. For those that are investors in real estate, hard money loans make the best loans if you cannot get a loan at a bank.

Contact us to see if you qualify for Hard Money Loans. Email us or call us at 800.842.2910

*This product is not regulated by the New York State  Department of Financial Services

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