Residential Hard Money LoansHow do they work exactly?
Have you been hoping to renovate or repair your home to increase its resale value? Have you bought a recent foreclosure at a great deal and hope to turn that distressed property into a sellable asset? Are you hoping to avoid foreclosure on your own home but unable to secure a loan with a traditional bank? Have you considered hard money loans?
When it comes to residential investment property financing, many people thought they were out of options once the traditional banks began to freeze lending assets. But for enterprising borrowers, private hard money lenders provide attractive alternatives to the local credit union. They can open new lines of credit based on the very real estate you're looking to transform.
A residential hard money loan is asset-based loan financing provided by a non-bank lender. These loans are secured by residential real estate and the amount of the loan can be up to 65 or 70% of the value of the real estate collateral. These loans are available for single or multi-family properties and can be a lot more flexible than traditional mortgage loans from traditional banks.
When borrowers approach private hard money lenders they can expect to provide proof of their real estate collateral and a few other qualifying criteria so they can determine what sort of risk your loan entails for them. Unlike with traditional loans, residential hard money loans don't rely as heavily on things like credit scores or lending history because of the assurance of the assets up for collateral. This means if you default on your loan, your property goes to the lender.
But most lenders don't want your property. They'd prefer you to make your payments on time and earn their money on high interest, while you continue to enjoy the benefits of your property and the loan. They're willing to work with you to provide fast and easy loans that no one else is willing to give you.
Residential hard money can be more restrictive than soft money with very specific and strict terms for their loans, but it's also quicker and easier to qualify if you do your due diligence in researching your lender. Always be sure to do your homework and compare several lenders' rates, asking as many questions as you need to make sure you understand the terms of your loan. When you find the right lender for you, you can have a smooth transition and move on with your life.
If you're looking for residential hard money loans, then you've come to the right place. Simply fill out our Hard Money Guide Contact Form and one of our experts will get back to you as soon as possible.