Thursday, November 26, 2015

Reasons To Work With Atlanta Private Lenders For Real Estate

By Tom G. Honeycutt

Most people who apply for a mortgage these days face challenges because of the strict requirements imposed by financial institutions. People who are unable to qualify for traditional mortgages can choose to get financing from a private lender. Private loans for buying real estate, also known as hard money loans are offered by ordinary citizens. In order to find Atlanta private lenders for real estate, investors may join a real estate investment club or request their relatives or friends to refer them to such lenders.

Hard money loans can be a great option when you have not been able to qualify for a conventional mortgage due to a poor credit history or if you are a self employed person who cannot provide proof of a steady income. These loans are secured by the property you want to buy. Therefore, you can get a loan if the property shows a likely profit.

Unlike typical mortgage loans, the repayment period for hard money loans is short. The lenders wish is to get a quick return on the money they invest. For this reason, they do not set up these loans to be paid within a number of years like typical mortgages.

It can be convenient to get a loan with a repayment period of 2 years or less. For example, investors can apply for it if they plan to sell the house within a short period. With such a loan, investors can buy a property and sell it for a profit.

Applying for hard money loan is also ideal when you are expecting to qualify for typical refinance some months after buying the house. You may also apply for this loan when planning to renovate the house to increase its value. After this, you can refinance the house or sell it.

You may also apply for a hard money loan if you are planning to carry out an extensive renovation project on your house. In such a case, you may not qualify for a conventional mortgage even though your credit score is good. A hard money lender can provide the financing you need to get the house in good condition.

The approval process of hard money loans is short. The lender can approve your loan within two or three weeks instead of 30 to 45 days, which often applies when applying for conventional mortgages. It is convenient to have a loan approved quickly, even though you will end up paying higher interest. Private loans have a higher interest rate because people who lack high credit scores can still borrow them.

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