Hard Money Lenders: Getting to Know Them - Rehab-Real-Estate
Author: Carrie Dawson
Seeking the assistance of hard money lenders is the perfect move for real estate investors who are having trouble acquiring funds for their investment properties. Because these private lenders can provide quick cash for their clients, an investor can easily receive the money he wants to borrow in just a short time.
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Despite their negative sounding name, http://www.rehabhardmoney.com" target="_blank" title="http://www.rehabhardmoney.com">hard money lendersare easier to deal with compared to traditional lenders such as banks, credit unions, and mortgage companies. Because they give importance to the after repair value, or ARV, of a collateralized property over a borrowers credit history when studying a loan application, an investor can still secure financing from them despite having a low credit score.
When it comes to obtaining funds from these non-traditional lenders, you dont have to wait for weeks or months just to find out the results of your loan application. You can get the money you need in just a number of days. And unlike when transacting with bank and other lending companies, you dont have to deal with a processing team because all you need is the approval of just one person.
Hard money lenders have their own terms and set of criteria when verifying a loans eligibility. Some of them may perform minor credit checks while the rest may visit the investment property to see if it is worth their time and money before providing the funds that their clients need. There are also times that these private lenders may ask borrowers to submit W-2s and other documents as requirements.
However, a disadvantage of securing the financial assistance of these people is that they usually ask for higher interest rates, which usually range from 12% to 18%. Most of the time, they also ask for hefty origination fees. An origination fee, by the way, is used to process a loan application. Repayment period for hard money loans is relatively shorter than those of conventional bank loans. According to some lenders, such procedures were used to protect their interests.
Before seeking the assistance of hard money lenders, you have to know the basics of hard money lending to ensure a smoother negotiation with these financiers. You have to learn their language to prevent confusion on your part.
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