The Key Elements of Great Resources
Advantages of Private Money Lenders and Loans
Hard money loans are considered to be financing which is being provided by non-institutional lenders. There are in fact many hard money lenders that are offering fast funding with good interest rates.
The borrower should implement a thorough check on the lender’s reputation as well as the business and when you implement your research, you will be able to find that hard money lenders will be able to give you a great advantage on your quest in funding real estate investment projects.
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. A hard money lender focuses whether the assets have good market value and the borrower equity would be 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.
Through the private lenders, you can then acquire more freedom when it comes to creating a customized repayment plan. You cannot actually get such freedom through 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.
If you are going to apply for a loan from a normal financial institutions, you will be expected to provide hard-set requirements such as your income history and experience and a whole others more. Bank approvals can sometimes 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
If you will get the loan from the established bank, you actually are subjected to prepayment penalties when you will pay off the loan before the 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 a private lender, there’s actually less emphasis that’s placed on 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. When you are able to meet such criteria, you will get a chance of getting funded.