Saturday, April 8, 2017

Basic Information On Hard Money Lenders

By Martha Thompson

There are times when we need a huge amount of money and the only way to have them is through loaning. But getting one from conventional lenders like banks take time so another option is to get a hard money loan. These are loans that are secured by real estate property and the terms usually last for twelve months but it is sometimes extended when needed.

The amount for lending is dependent with the value the property has and is being used for the loan to be secured. Hard money lenders Seattle companies determine the value of these things and are less concerned with the credit possessed by the borrower compared to the property value. They can also lend you money even when the banks could not lend you which is a sample of their differences.

A borrower might acquire a loan with most type of properties like land, industrial, commercial and residential. Some of them specialized on a particular type of property and the reason is that they lack experience with other types compared to the one they are specializing. Knowing in advance which one they specialize is helpful in saving some time with negotiating.

There are only certain deals that are ideal for this loaning method specially if you possess still a good credit score and bank financing is still possible for you. The disadvantage with this is the big amount of time it takes the application to be processed in getting one which usually takes a few months. When you have enough time to wait then getting from the bank is a better option unless rejected already.

Hard money is being used primarily by real estate investors because they need to obtain the funding as soon as possible. This is to attract the attention of the seller of a property with many competing bids with your ability to have the funds quickly. You will have an edge compared to others that offers slower funding.

Others also use this when rejected by banks due to their low credit scores or other financial issues they have. Income history is also being checked so having a new job with high salary does not assure you of getting one from them. These issues are overlooked by lenders if they know you would be able to pay the capital and the rest on time.

Interest rates differ between lenders and the region or state they are operating. More competition will also tend to lower their rates to remain competitive in the industry. The interest rates are still higher than the banks have because of higher risk involved in these transactions.

Finding a lender could be done by searching online for those operating near you. Club meetings by real estate property investors are another place where you can find one that is looking also for borrowers. If ever you are unable to find one there then you could ask other investors if they can recommend one.

Contact them and compare the requirements needed for loaning and their interest rates. Research their background to know about their reputation more. Knowing these things will prepare you when dealing with one.

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