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 needs to do a thorough check with the reputation of the lender and the business and as you implement your research, you will be able to find that hard money lenders are able to give you a great advantage when it comes to funding a real estate investment project.
Much Faster Approvals
One of the benefit about hard money lenders is the fact that investors will be able to secure a pre-approval for just two days after submitting the documents that were requested by the lender. The hard money lender places their focus whether their 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.
Through private lenders, you will be able to get more freedom in creating a customized repayment plan. You cannot acquire this kind of freedom with big financial institutions. You will instead have to accept the payment terms that were 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.
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. But with hard money lenders, you will not be burdened with 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 Never a Problem
Through a private lender, there’s actually less emphasis that’s placed on your weak credit history. This would be because a private lender is going to be based with loan approval on the property value, borrower equity, etc. Meeting this criteria will give you a good chance of getting funded.