The Advantages of Considering Hard Money Loans
A hard money loan refer on the financing which is provided by a non-institutional lender. There are a lot of hard money lenders who are offering fast funding through an attractive interest rate. Borrowers should consider performing through checks about the reputation of the lender and the business, but when you do your research, you will be able to find that hard money lenders can give you various advantages on funding real estate investment project.
Below are some benefits which it can actually offer:
One of the benefits that can be acquired from hard money loans 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. 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.
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.
Prepayment Penalties are Non
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 when you are going to get a loan or not. With private lenders, there is actually less emphasis on weak credit history. This is actually because private lender base their loan approvals on the value of property, borrower equity and others more. 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.