Benefits Offered by Hard Money Lenders
Hard money loans are financing that’s provided by the 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. 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
With a private lender, you could get more freedom when it comes to creating customized repayment plans. 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. But through private lenders, you will be able to talk with them and end with an agreeable repayment plan which you think is suitable for you.
Few Requirements Needed
When you are applying for a loan from normal financial institutions, you are expected to meet various hard-set requirements such as experience, income history and many more. It’s no secret that a bank approval can be stressful. With the hard money lenders, you will not be burdened about the various requirements. This would be as long as you have high-value assets that has at least 20% equity stake, there are good chances that you will be able to qualify with 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 Not an Issue
Through private lenders, there’s less emphasis placed with 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.