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. The hard money lender places their focus whether their assets comes with good market value and that the borrower equity is about 20%. Financing will be able to take place for only a less week than normal loans which usually takes for a month or more. When you are inquiring about hard money lenders, the big question would be on how fast they could fund.
Payments are made Flexible
With a private lender, you could get more freedom when it comes to creating customized repayment plans. But this freedom is not present with big financial institutions. Instead, you must accept the payment terms which were being set by the bank. Through private lenders however, you will be able to talk with them and you could end up with an agreeable repayment plan which you think is really suitable for you.
Few Requirements Necessary
If you are going to apply for a loan from a normal financial institutions, you will be expected to provide hard-set requirements such as your income history and experience and a whole others more. The bank approvals sometimes 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
If you will get the loan from the established bank, you actually are subjected to prepayment penalties when you will pay off the loan before the maturation date. Most of the fix and flip lenders will not charge prepayment penalties, so if you ever have extra cash and decides to pay off the loan before its due date, you will be confident doing it without worrying about being penalized for it.
Credit History is Not an Issue
With private lenders, less emphasis are placed on your weak credit history. This in fact is because a private lender will be based with the loan approvals on the borrower equity, property value, etc. Meeting this criteria will give you a good chance of getting funded.