Hard Money Loans
Why They're So Great
Being co owner of a comany that gives out hard money I have a tendency to talk up hard money loans. However, once in a while it’s good to go back to the fundamentals of this loan. Why is this particular loan sometimes better? Who would benefit from this loan? How does it function compared to the FHA loan? In this blog I’ve compiled a list of reasons why a person purchasing a home might need a hard money loan instead of a conventional loan.
The first reason for this loan is having bad or poor credit. Enough said, wouldn’t you agree? But let me delve in a little deeper. If you as the borrower has damaged credit for whatever reason, it’s very difficult to get a conventional loan through a bank or other institutional lenders. Banks look at the borrower and see their credit score first whereas Hard Money Lenders just want to know if you can both repay the loan and have some downpayment or coming in with equity (average is 30%).
This loan could also be right for you if you’re having difficulty getting documentation of your income, such as those who are self-employed. This is a fairly often occurring reason to get hard money.
In this market flips have become a very popular way of making a living or even to get a good deal price-wise. There are quite a number of homes that go on the market not fully ready to move in or “turn-key”. Buying a home that’s worse for wear, fixing its problems and then reselling has been a great way to keep homes in the market and still refresh their image. However, with this comes the difficulty of getting financing. If the home is deemed unlivable you’re not likely to get a conventional loan on the home. So this makes hard money a great option for those who invest in real estate as well as those who want to renovate the home the way they want while still getting a good deal on the purchase price.
Another top reason people decide to get hard money is timing. This type of
lending can be done quickly.. in a matter of days in fact. This makes the buyer’s offer much stronger and more readily accepted. Having access to this money quickly could be your best asset. And then down the road one can refinance to a conventional loan when time isn’t of the essence.
Hard money is traditionally a pretty easy loan to process from start to finish. Traditional financing can be very difficult even after you do qualify. Hard money lenders deal with much of the same documentation but aren’t shooting down as many loans as other institutions.
I am Co-Owner of Sun Pacific Mortgage and Real Estate and also work beside Forest Tardibuono, the Broker and Loan Officer of this business. We offer hard money loans to those trying to finance their home purchase, want a Bridge loan, refinance, do a commercial loan or invest in real estate. We have been in business since 1988 and take pride in giving quality service to all those I have been able to help and can help in the future.
Lynn Tardibuono – Flipper Chick- Real Estate Agent and Co-Owner of Sun Pacific Mortgage and Real Estate. Serving Sonoma County since 1988. Her number is (707)523-2099. Also be sure to like me on facebook! Just click this link.
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