Benefits Offered by Hard Money Lenders
Hard money loans are financing that’s provided by the non-institutional lenders. You could actually find a lot of hard money lenders that are offering fast funding and comes with attractive interest rates.
The borrower needs to do a thorough check with the reputation of the lender and the business and as you implement your research, you will be able to find that hard money lenders are able to give you a great advantage when it comes to funding a real estate investment project.
Approvals are Faster
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%. 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
Through private lenders, you will be able to get more freedom in creating a customized repayment plan. You cannot acquire this kind of freedom with big financial institutions. But you will instead need to accept the payment terms 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 plan on applying for a loan from normal financial institutions, you will be expected to give the necessary requirements like your income history and experience and others more. The bank approvals sometimes can be stressful. But with hard money lenders, you will not be burdened with various 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 actually don’t charge a prepayment penalty, so if you have an extra cash and then you decide to pay off the loan before its due date, you will definitely be confident doing it without worrying of any penalties.
Credit History is Never a Problem
Through a private lender, there’s actually less emphasis that’s 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.