If you"re an investor, you will fall in love with
hard money residential loans. These loans have many benefits that many investors are enjoying right now. Here are at least four reasons why you must give this form of financing a try.
1.The processing of loans is much faster compared to banks and other traditional lenders. A hard money broker needs up to around two weeks to process a loan application from a new borrower. If you are a customer, then he might release the money you need in just two days. These lenders usually cater to just real estate investors so their clients are limited and they have less applications to process. Meanwhile, traditional lending institutions need at least 30 days to process applications. They cater to a wider clientele so they have a lot of applications to process. As investors, you know that the deal often goes to the one who has the financing in place.
2.Applying for hard money residential loans is more convenient. Unlike traditional lenders, there are less documents presented when applying for hard money financing. That"s because your credit score and credit report will hardly matter to these non-traditional lenders. They are more concerned with the collateral and not the borrower. If you offer them good collateral, they will approve the loan. For real estate investors, they can use the property they wish to invest in as collateral. The lender will determine whether that property has high value in good condition.
3.A
hard money broker is easier to convince than a group of assessors working for a bank. Since these lenders usually work on their own, they have the final say on the approval of loans. If you have good rapport with the lender, convincing him to release your borrowed money will be easier. Banks, on the other hand, employ a staff that will process your papers. The final approval will also depend on the manager and other personal.
4.
Hard money residential loans are usually bigger than typical bank loans. Traditional lenders base their computation on the current market value of the property. For instance, if you want to rehab a dilapidated property that"s worth $50,000, you can only apply for that much money from banks. Hard money lenders, meanwhile, will base their computation on the after repair value of the house. So if that property is worth $120,000 after being improved, then you"ll get around 60% of that amount. Some lenders give up to 70% of the after repair value.
You can get more information about these unique loans at RehabList.com today.
