What is hard money? When it comes to real estate this type of lending can facilitate the dreams of people that would not qualify for a bank loan. Potential buyers need to know how to choose a commercial hard money lender using common sense.
Since the market crashed eight years ago, lenders have become increasingly stringent in the standards that borrowers must meet to have a mortgage loan approved. Many, many people who once had excellent credit scores find themselves in the fair or poor categories. Even with a good, reliable income consumers with fair to poor credit scores will not qualify for a traditional mortgage loan.
HMLs understand that people without excellent credit scores can still be a good business investment for the company. The borrower and the lender both come out ahead. The company ofter offers a transitional financing. A potential buyer who does not have a down payment or an excellent credit score, can use the HML to get into the property then refinance when the time is right. Equity and a good payment history will make the home owner more attractive to traditional lenders.
The interest rates are not exorbitant. In fact they are often lower than the average home buyer faced less than ten years ago. Of course rates different, depending on the lender and the borrower. So it does pay to shop around for the best deal.
It is good to know the factors that can affect the interest rate. A quick internet search will show the rate charged varies from state to state. The proposed length of the loan makes a significant difference. Lenders will charge less for a one to two year loan than for a ninety day loan. Buyers who are flipping houses will naturally pay higher interest than someone who plans to live in the home.
Look for the HML that fits your needs and vise versa. Local companies may be more flexible than their corporate competitors. The most attractive feature of your loan will it will not require a down payment. Your future equity in your home can serve as a down payment when the time comes to refinance the mortgage.
The high cost of rent may be what keeps people from being able to save for a down payment. Renting has none of the tax benefits of home ownership. Take the time to do your homework to find a reliable lender. Check their business ratings and the comments on social media. Your impossible dream has just become possible.
Since the market crashed eight years ago, lenders have become increasingly stringent in the standards that borrowers must meet to have a mortgage loan approved. Many, many people who once had excellent credit scores find themselves in the fair or poor categories. Even with a good, reliable income consumers with fair to poor credit scores will not qualify for a traditional mortgage loan.
HMLs understand that people without excellent credit scores can still be a good business investment for the company. The borrower and the lender both come out ahead. The company ofter offers a transitional financing. A potential buyer who does not have a down payment or an excellent credit score, can use the HML to get into the property then refinance when the time is right. Equity and a good payment history will make the home owner more attractive to traditional lenders.
The interest rates are not exorbitant. In fact they are often lower than the average home buyer faced less than ten years ago. Of course rates different, depending on the lender and the borrower. So it does pay to shop around for the best deal.
It is good to know the factors that can affect the interest rate. A quick internet search will show the rate charged varies from state to state. The proposed length of the loan makes a significant difference. Lenders will charge less for a one to two year loan than for a ninety day loan. Buyers who are flipping houses will naturally pay higher interest than someone who plans to live in the home.
Look for the HML that fits your needs and vise versa. Local companies may be more flexible than their corporate competitors. The most attractive feature of your loan will it will not require a down payment. Your future equity in your home can serve as a down payment when the time comes to refinance the mortgage.
The high cost of rent may be what keeps people from being able to save for a down payment. Renting has none of the tax benefits of home ownership. Take the time to do your homework to find a reliable lender. Check their business ratings and the comments on social media. Your impossible dream has just become possible.
About the Author:
Tom G. Honeycutt is a full-time real estate entrepreneur in Atlanta, GA. Tom helps readers by providing practical and useful knowledge to better understand lending choices. If you are looking for Commercial Mortgage Finance Company Loans | Atlanta, GA He suggests you check out the website iFund International.
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