The hard money lenders ensure that the rehabbers are able to get money to fund the project of renovating a house that is later sold.The money is mostly used to pay contractors, purchase the property and to cover any expense that may emerge. The financing is more flexible than the traditional lending such as the banks. The article highlights the essential details about the harmony lending.
The Loans Takes Shorter Time
It takes short time to repay these types of loans.The maximum period for these loans is three years and the interest rates vary depending on the company. The lenders expect the borrowers to pay the interest rates during the repair period and clear the final principal after the house gets a new customer. Your eligibility will determine the amounts that you will be loaned.
Fast Turnaround Time
These types of loan facilities are faster than the traditional lending such as the banks. You are likely to receive your money within the same day when you qualify. The rehabbers are likely to have a quick project hence more benefits when they are able to receive the money on a single day. The worth of the property is used to calculate the amounts that the borrower can be given.
The documentation may vary from one company to another. You need to have a detailed financial plan for the money that you are requesting to increase your chance of getting high amounts. The documents that are important includes the appraisal certifies, the recent tax returns and the repair costs of the building.
The Maximum Funding Stretches Up To 70%
The financing amounts will be agreed upon after different analysis is done. Most companies will stretch up to 70% of funding of the house after all the renovations have been done. The lenders provide the 70% lending to ensure that they curb the risks that are involved with defaulting.
The 30% Capital From The Borrower Shows Commitment
The 30% capital from the borrower is necessary to the financiers to show that as a borrower, you are also committed to your project. As a borrower you should consider other forms of financing such as the credit cards.
The hard money lending has led to the boom in the reals estate business as a result of the quick access to financial aid. The value of the property determines the amounts that the borrower gets. You should check the fine details of the lending to ensure that you get the best financiers. The hard money lending is flexible and they stretch their services up to the commercial buildings.