Seeking financing for real estate projects has become somewhat simpler now. This is primarily due to the different loan options available today.
Real estate investors no longer have to rely solely on commercial banks to obtain loans. Hard money loans are an excellent option for financing all types of real estate projects.
Here is everything you need to know about hard money loans:
A hard money loan is a short-term loan with 1-year duration. Private investors or companies issue hard money loans and not banks or other traditional lenders.
Whether you need funds for developing or expanding a real estate property, you can borrow hard money loan for any type of property, such as commercial property, residential property, land, industrial land, and more. However, some hard money lenders may offer only one specific property type. Therefore, it’s important to check the type of hard money loans your lender is offering.
Due to the short-term nature of hard money loans, borrowers must make monthly payments and a balloon payment to lenders. This balloon payment is due at the end of the loan term. Interest rates on hard money loans are generally higher than conventional loans. In most cases, interest rates start at 7.7 percent on account of the shorter loan duration.
Based on the value of your property, a lender will determine the amount of hard money loan you will receive. This may be either the property you already own and will use as collateral or the property you are acquiring.
Hard money lenders are mainly concerned about the property value of a borrower rather than their credit score. On the other hand, the first thing banks check about a borrower is their credit score. A credit score helps banks and traditional lenders gauge a borrower’s financial worthiness. The decision to accept or reject a borrower’s bank loan application depends on their credit score.
You should apply for a hard money loan in the following cases:
Unlike bank loans, hard money loans do not come with complex regulations. Hard money lenders do not require borrowers to fill countless application forms. Similarly, they do not waste time verifying borrowers’ bank statements, etc. Hard money lenders are simply interested in closing loans.
There are different types of hard money loans. If you are looking for the right hard money loan for your specific borrowing requirements, Global Capital Partners Fund Limited has got you covered!
As one of the leading commercial hard money lenders in NYC, we specialize in tailored lending solutions to suit your specific business needs Connect with us for more information.