Benefits Offered by Hard Money Lenders
Hard money loans are considered to be financing which is being provided by non-institutional lenders. There are in fact many hard money lenders that are offering 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
A benefit about hard money lenders is the fact that investors could in fact secure pre-approvals in just a maximum of two days when they have submitted the documents being requested by the lender. Hard money lenders actually focus if the 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. If you will inquire about hard money lenders, a question that you should ask them is on how fast they could fund.
Payments are made Flexible
Through the private lenders, you can then acquire more freedom when it comes to creating a customized repayment plan. But this freedom is not present with big financial institutions. Instead, you must accept the payment terms which 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.
Few Requirements Necessary
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 is as long as you have high-value assets and also have at least about 20% equity stake, there’s a good chance that you could qualify for 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 Never a Problem
Through private lenders, there’s less emphasis placed with 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.