Hard money is a way to borrow without the restrictions of a large mortgage lender. Since the money is coming from individual or investors, most hoops to jump through are eliminated. Traditional mortgages are painfully time-consuming and require tons of proof that you can repay them. Usually, large commercial lenders require proof of income, tax returns, employment history, credit history and much more. Even with great credit and plenty of income the process is slow, expensive, and not a guarantee you will be lent to. Hard money lending takes a different approach. Since the loan is secured through real-estate, not credit, there are less variables to worry about. Hard money will provide borrowers with options and won’t turn away people that don’t fit a conventional box. It’s always a good idea to shop prices, I recommend californiahardmoneydirect.net for an initial baseline.
Hard money can connect people that have trouble financing through traditional channels a place to get a loan. Borrowers that need an nontraditional loan can realize the benefits of hard money lending. Hard money loan agreements are much less rigid than traditional loan agreements. The underwriting process isn’t issued by a bank or credit union so the standards are set by the lender. Loans are structured on an individual basis, lenders set their own guidelines. so things like repayment schedules may be able to be negotiated. Traditional loans lock borrowers into decades long payment plans. Hard money is structured for a typical term of 12 months to 5 years, this lets borrowers get in and out of the loan quickly. But the biggest difference from traditional home loans is interest rate. A government backed loan is less risky for big lenders, so they feel more comfortable lending at a lower rate. A Fannie Mae or Freddie Mac loan is government regulated and cheaper, but requires many more conditions and much more time invested. If you don’t have time to work with big lenders, hard money loans are right for you. Real-estate is a rapid business, time kills deals. When you don’t have time to rely on big lenders hard money loans will close the deal quickly.
Before finding a hard money lender it’s important to understand what you need as a borrower. Understanding your needs as the borrower will help you match with a lender. Stick to companies that have a great reputation, that’s why I like californiahardmoney.net Speed, efficiency, and trust are important when choosing a company to partner with.…Not a traditional borrower, try-hard money lending Continue Reading