Hard money loans refer with the financing that is actually provided by the non-institutional lender. There actually are many hard money lenders who actually offers fast funding through attractive interest rates. As a borrower, you need to perform thorough checks when it comes to the reputation of the lender as well as the business, but if you do your research, you actually will find that hard money lenders could give you different advantages for funding real estate investment project.
Some of the benefits that can be obtained from it are as follows:
Approvals are Faster
One benefit which could be obtained from construction loan draw is on the fact that investors can secure pre-approvals in just one or two days when they submitted the needed documents that the lender requested. A hard money lender places their focus if the asset comes with good market value and borrower equity to at least 20%. The financing actually takes place for only less than a week than normal loans which usually takes a month or probably more.
Through private lenders, you are able to have more freedom on creating customized repayment plans. By having a big financial institution, you will not have such freedom, but you will need to accept the payment terms that have been set by the bank. If you opt for a private lender, you can actually discuss with them and come to a mutually agreeable repayment plan which you think is really suitable for you.
Prepayment Penalties are Non
When you acquire fix and flip loan california coming from an established bank, you could be subjected to prepayment penalties when paying off the loan before its maturation date. Most fix and flip lenders does not really charge prepayment penalties, so when you are able to come across extra cash and decides in paying off the loan before its due date, you surely will be confident in doing it without worrying getting penalized for it.
Credit History is not a Problem
When it comes to big lending institutions, credit history have a huge impact if you are going to get a loan or not. Through private lenders, there is less emphasis placed for weak credit history. This is simply for the reason that private lenders usually put their basis of loan approval on borrower equity, property value, etc. This would be as long as you can meet on the criterias, you have a good chance in getting the funds. To get some facts about loans, go to https://en.wikipedia.org/wiki/Small_business_financing.
Another benefit which you could acquire from hard money lenders is that there are more properties which are renovated in the community and the property values rise and helps improve the quality of life of neighborhoods.