If you want to become a home owner or investor, but are unable to qualify for traditional lending, hard money is exactly what you need. This explanation of how to choose a commercial hard money lender sensibly and some research can help you achieve your goal.
Eight years ago the market crashed, in part due to irresponsible lending of very large financial institutions. Thanks to this crash, without an excellent credit score it has become virtually impossible for the average consumer to purchase a home or invest in residential property. Even folks with low credit scores can find the right hard money lender, HML, to make their dreams a reality.
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.
Renting a home is not a good way to manage your money. How does your potential lender rate with the Better Business Bureau or AM Best? What do their borrowers say on social media? Flipping houses or owning a home has significant tax advantages. Do not let the high cost of rent stop you from going after your dreams.
Eight years ago the market crashed, in part due to irresponsible lending of very large financial institutions. Thanks to this crash, without an excellent credit score it has become virtually impossible for the average consumer to purchase a home or invest in residential property. Even folks with low credit scores can find the right hard money lender, HML, to make their dreams a reality.
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.
Renting a home is not a good way to manage your money. How does your potential lender rate with the Better Business Bureau or AM Best? What do their borrowers say on social media? Flipping houses or owning a home has significant tax advantages. Do not let the high cost of rent stop you from going after your dreams.
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 Funding | Atlanta, GA He suggests you check out the website iFund International.
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