Advantages of Hard Money Loans
Having provision of finances by non-institutional lenders. In today’s world, there are a good number of non-institutional lenders that offer first funding rates that have an attractive interest. Going through a lenders business and reputation is one key point a borrower should observe. Through your research, you will be able to identify different lenders, learn about their policies, reviews, and from them, you can identify which lender works best for you. Below are the advantages of hard money loans.
There is first approval. The good thing with hard money loans is that investors can get pre-approval of their loans within 1 or 2 days if they have submitted the required documents that lenders may need. Financing may take less than a week in comparison to normal loans which may take a month or more. Ask questions like how quickly can a hard money lender find you when making inquiries.
There is flexibility in payment. When working with a private lender, you have an opportunity to create a repayment plan that is customized. The Big financial institution will not give you the freedom to customize the payment plan. Instead, they will have to work on their terms of payment the bank has put in place. Private lenders make it conducive for beneficiaries where they may have a discussion and come into a mutual payment agreeable plan that is best suitable for you.
Fewer requirements. When using a financial institution to apply for a loan, many requirements will be expected to be met like experience, income history, among others. Bank approvals, in most cases, feel like a cumbersome process. The Hard money lender, in most cases, will not abandon you with many requirements. Persons with high-value assets have an Equity stake of at least 20% in it, and there is a possibility that your loan will qualify.
There will be zero payment penalties. Loans taken from an established bank May in incur payment penalties if one pays off the loan before the date of mutilation. Most flip and fix lenders will not charge prepayment penalties. If by chance you get money and decide to pay off your loan before it’s the due date, you can do so confidently without worrying about penalties.
Credit history is not a big issue. When using a big financial institution, the history of your credit can play a big role in whether you will get the loan or not. When it comes to private lenders, there is less emphasis on weak credit history. Private lenders base their loans approval on the beneficial equity property value, among others. If you meet the requirement, getting funding is not a problem.
Transparency is maintained. Despite being mentioned in all types of fees in a bank on a document, lenders will be required to sign hidden. Once the loan is approved, and the buyer’s repayment begins, that’s when they will know of those charges. Private money lenders are transparent about their customer interest rate and fees to be added on the principal loan amount when you are paying.