Finding the best hard money lenders can be challenging due to the high number of hard money lenders that are available today. Each hard money lender that you come across promises you the best terms and quick loan approval. This can make finding the best lender to get your hard money loan from a headache. However, when you have tips to guide you, you can relax and start the search for a hard money lender comfortably.
Consider the hard money loan process
A hard money loan should give you a quick capital for purchasing an investment property. Since some investors seek financing after winning a property auction, then need financing within 72 hours. It is therefore, important that you consider the hard money loan process of the lender that you are considering when looking for a hard money loan. All you need is to provide collateral for the loan and fill the necessary documents to get your hard money loan on time.
You do not want to be frustrated when you cannot reach the hard money lender after signing for a hard money loan. It is therefore important that you choose a reputable hard money lender. Conduct a quick online search to find out what other borrowers say about the hard money lender that you are thinking of. If you have another loan that you are paying, find a hard money lender who will give you the best deal on your hard money loan. There are many reliable hard money lenders that you can contact and get the best deal from. Just conduct a simple online search to find the best hard money lenders.
Stress-free application and approval process
The main reason why you might prefer hard money loans to conventional bank loans is the fast application and approval process. This is because having your loan approved by a conventional bank can be a headache. You also have to wait for days to have your loan application approved. A good hard money lender should understand this and make your application and approval process easier and efficient. Your time is very important and the lender should therefore process and issue loans quickly.
The best lenders offer friendly terms to hard money borrowers. Before you sign up for a hard money loan, read through the terms of the loan and understand them properly. Agree to a written contract only and when certain that you understand every term in it.
A good hard money lender will offer reasonable interest rates on hard money loans. Usually, interest rates for hard money loans range between 10 and 18 percent per year. The interest rates for hard money loans are determined by lenders after evaluating the collateral. Nevertheless, the best lenders will always charge borrowers reasonable interest rates.
Generally, a hard money lender should aim at making the process of getting a hard money loan simple, efficient and transparent. The best hard money lenders should also charge reasonable interest rates and fees for their loans.
A hard money lender is a lending individual or company who offers specialized collateral-backed loans. The lender tends to offer short-term loan or capital also called a bridge loan that offers cash and/or funding on the basis of the collateral value. This lender accepts collateral in different forms including boats, cars, boats, hard assets, airplanes and paintings among others. The lender is given that name because a real asset which could be a property is used to secure the money. Getting a hard money loan is usually easier than getting a bank loan. However, the overall cost of getting this loan is bigger and even the involved risk is bigger for the borrower.
About the lender
The lender of hard money is in most cases a company or a person with money to invest. In some cases, a lender can be a person with cash in large amount in hard. The money is given as loans to several people so that they can return with interest. There are also large companies that operate as lenders of hard money. These lend hard money to thousands or hundreds of small businesses and individuals. Many lenders are providers of merchant advance cash. These provide cash to businesses which they get back in form of a share of their earnings in the future.
How the business works
Some lenders give loans to startup businesses which are secured with the property of the business owner. With such a hard money lender, borrowers will never get loans unless they have an asset which could be a home that the lender can repossess if the borrower fails to pay. Nevertheless, most lenders led cash advance to startups or existing businesses in lump sum and get the payment through their future earnings. With such lenders, a percentage of the transactions of the credit card of the business is deducted automatically.
The major advantage of getting a loan from ellisequity is that they work even with businesses with little income or collateral which include startups. Usually, applying for the loans is easy and they are processed quickly. The easy access of these loans and fast approval are what make many individuals and startup businesses get hard money loans. Another major advantage is the fact that no sales history is required before the loan is issued. This makes them ideal for a business that is starting out.
If the lender is a company that collects a percentage of the future profit, the loan may not be under the laws which limit the rates of interest. As such, the rates of the loans’ interest are very high. Typically, such a lender will take between 30% and 45% of the sales made through the credit card of the business until the borrower pays off the loan. This implies that there will be a significant reduction in the income of the borrower until they pay off the loan completely. The loan can also take tears to pay if the business grows at a slower rate and in case of repayment failure, the borrower can be sued in court for breaching the contract. As such, it is important for an individual or startup business to be careful about the terms of the contract when getting a loan from a hard money lender.
To get the best hard money Houston deal, you must find the best hard money lender. Hard money lenders provide financial resources to property owners or real estate investors who are looking for non-traditional loans. Qualifying for a loan from a hard money lender in Houston is easier than qualifying for a loan from a bank. This is because banks have stringent processes and many requirements that you must meet to get a loan. Most hard money lenders are lenient. However, their interest rates are high because they face high default risk. Therefore, as a borrower you might want to know how you can get the best deal on your hard money loan.
Know your needs
When getting a hard money loan, start by determining your specific money needs. Different hard money lenders offer different types of financing. Some specialize in rescuing property owners who are facing foreclosures, others specialize in investor financing while others specialize in financing commercial properties. In most cases, a hard money lender will give you an advance loan in cash for a building, home or land as long as there is adequate equity. It is important that you know why you need hard money so that you can easily bargain for your hard money loan deal.
Plan in advance
Before you approach a hard money lender, come up with a plan. Hard money Lenders Houston loans are usually short term loans. You will use an asset as the collateral in securing the loan. Because the interest rates for these loans are exorbitant, it is important that you establish a plan for bargaining and existing before you approach a hard money lender. Use the proceeds from the hard money to pay off credit cards and debts whose interest rates are 15% or more. This will lower the ratio of your debt while improving your credit. It will also enable you to prepare for refinancing and paying off the loan from a hard money lender.
Conduct some research
Take time to identify reputable hard money lenders with the best interest rates. There are many websites and directories that offer information about different hard money lenders in Houston. Visit such websites and directories for more information about different lenders. You can apply for a loan from different lenders by simply filling an application form. Different lenders will contact you so that you can discuss your hard money loans. Compare the deals that these lenders give you before you make a final decision on the lender to get a hard money loan from.
It is very important that you consider the reputation that a hard money lender has established in Houston. Other borrowers may have written reviews about a borrower that you are considering getting a hard money loan from. Read such reviews before making your decision. You should also consider the terms to get the loan that the hard money lender is giving you. Choose a loan with friendly terms.
Generally, to get the best hard money Houston loan you need to choose the best hard money lender on the basis of several factors.
Commercial hard money lenders offer hard money loans to commercial property investors. These lenders are still lending money to borrowers even after the recession which hit most economic sectors across the world. Today, there are many hard money lenders with loans that you should consider when looking for a hard money lender to get your commercial establishment or investment loan from.
Short term loan
Typically, a commercial hard money loan refers to a short term loan. It commonly has a one year term although you can negotiate for the extension of the term. Some hard money lenders can offer commercial loans of up to three years. This is due to the fact that hard money lenders are also trying to lend more money so that they can realize more profits.
Consider prepayment penalties and exit fees
This is very important factor to consider when getting a commercial hard money loan. An exit fee is usually a major fee that most hard money lenders will charge you when you pay off the loan before the term end. Some lenders will charge you this fee even if you pay off the loan early, late or on time. Additionally, be careful about the late fees that some lenders charge for balloon payment. With more than 70 percent of hard money loans being paid off late, lenders do everything possible to track the charges for balloon payments which are made late. This can be even ten points with some commercial hard money lenders. It is important that you consider such fees and payments when getting your commercial hard money loan so that you can apply for a loan that you can pay off comfortably.
Speed is very important in investment. You have to get financing quickly so that you can buy a commercial property before another investor buys it. Many commercial lenders of hard money win businesses on the basis of their speed. A hard money loan deal can be closed with ten days or less. This is what makes hard money loans a preference for most property investors. Therefore, look for a lender that will take the shortest time possible to process your commercial loan so that you can purchase the property that you are eyeing before another investor takes it.
Value added deals
There are lenders of commercial hard money who specialize in the value added deals. These are deals in which developers purchase existing properties after which they improve them using the loans that they get from hard money lenders. For instance, a developer can purchase a raw land then up-zone the property. A developer can also purchase an empty retail center after which they upgrade it before installing new improvements for tenants. After improving the property, a developer can sell it or even refinance it in order to get out the profit.
Generally, there are many things that you need to consider when dealing with a commercial lender of hard money. Take your time to consider all the dynamics of commercial hard money lenders and their loans before you proceed to sign for your commercial hard money loan.