The Advantages of Considering Hard Money Loans
Hard money loans refers on the financing that is provided by the non-institutional lenders. There are a lot of hard money lenders who are offering fast funding through an attractive interest rate. 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.
Below are some benefits which it can actually offer:
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. Hard money lenders focuses whether the asset have a good market value and borrower equity is for at least 20%. Financing takes place only within just a week than the normal loans which takes a month or maybe more.
Have Flexible Payments
With private lenders, you actually will have more freedom in 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. If you opt for a private lender, you can actually discuss with them and come to a mutually agreeable repayment plan which you think is really suitable for you.
Zero on Prepayment Penalties
When you acquire a loan coming from an established bank, you could be subjected to prepayment penalties when paying off the loan before its 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
When it comes to big lending institutions, credit history have a huge impact if you are going to get 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 could meet the criteria, you have a good chance of getting the funds.
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.