A Simple Plan For Investigating Loans
Benefits Offered by Hard Money Lenders
Hard money loans are financing that’s provided by the non-institutional lenders. There are actually a lot of hard money lenders who actually offers fast funding with good interest rates.
The borrower should perform a thorough check with the reputation of the lender and the business and as you do your research, you will also find that hard money lenders will be able to provide a good advantage when it comes to funding real estate investment projects.
Much Faster Approvals
One of the benefits with hard money loans is that investors could secure pre-approvals in only one or two days when they have submitted the documents which were requested by the lender. The hard money lender places their focus whether their assets comes with good market value and that the borrower equity is about 20%. The financing could take place for just less a week compared to normal loans that could take about a month or more. When you are inquiring about hard money lenders, the big question would be on how fast they could fund.
With a private lender, you could get more freedom when it comes to creating customized repayment plans. You cannot acquire this kind of freedom with big financial institutions. You will instead have to accept the payment terms that were being set by the bank. However, with private lenders, you could talk with them and then end up with an agreeable repayment plan that you find suitable for you.
When you are applying for a loan from normal financial institutions, you are expected to meet various hard-set requirements such as experience, income history and many more. It’s no secret that a bank approval can be stressful. Through hard money lenders, you will not be burdened on the different requirements. This would be as long as you have high-value assets that has at least 20% equity stake, there are good chances that you will be able to qualify with the loan.
No Prepayment Penalties Present
If you acquire the loan from an established bank, you will be subjected to prepayment penalties if you are going to pay off the loan before its maturation date. Most fix and flip lenders doesn’t charge prepayment penalties, so when you have an extra cash and you decide to pay off the loan before the due date, you will surely be confident to do it without having to worry of being penalized.
Credit History is Not an Issue
With private lenders, less emphasis are placed on your weak credit history. This would be because a private lender is going to be based with loan approval on the property value, borrower equity, etc. Meeting this criteria will give you a good chance of getting funded.