Hard money loans are perfect for people wanting to buy a distressed property. Although these loans have higher rates compared with regular loans, they’re ideal for investors who are competing with all-cash buyers.
However, there are a few facts you might need to know before making any final decisions. Top hard money lenders in Miami, FL, including Monroe Funding Corporation, reveal a few points you ought to know about hard money loans.
1. It is best for those who don’t qualify for traditional loans
Hard money loans are great for borrowers who don’t qualify for a 30-year fixed-rate home loan and other traditional loans. This loan is the only available option for people who find it impossible to secure a traditional mortgage.
2. It is suitable for distressed properties
Unlike conventional mortgages, hard money loans are perfect for investors who are looking to buy a distressed real estate property. Hard money lenders often use the loan-to-value ratio when a property is still in good condition and the after-rehab-value ratio for properties that are in good condition.
2. It is great for property flippers
People who are interested in buying, renovating and then reselling properties often choose hard money mortgages to finance such projects. Applying for a hard money loan will give them access to finances in the shortest possible time.
3. It has a shorter approval time
Hard money loans offer a much quicker approval compared with conventional mortgages. In fact, it only takes as short as three minutes to get pre-approved. Compared with conventional mortgages (which take 30–45 days for approval), it only takes 10–15 days to get the money.
Hard money loans are best for both buy-and-hold investors and property flippers because of its easy application. Find a company that can help you with the loan application and can provide you with the assistance that you need.