No other lender can match the convenience that commercial lenders provide through their hard money loans.
Hard money loans are a very handy tool, especially when it comes to buying of real estate property. It can be obtained within a few days, that too with very flexible terms. Hard money loans are designed for short-term only as they generally carry a higher interest rate.
Getting approval for a hard money loan is very easy as commercial lenders do not consider credit cores before giving out loans. However, the lenders are interested in the exit strategy of the borrower.
The exit strategy needs to be realistic and should be able to recover an adequate amount of money to pay back the loan.
Here are some of the exit strategies that are often employed by borrowers:
Refinancing with Traditional Mortgage
If a homeowner has taken a hard money bridge loan to purchase a new home, the best exit strategy is to get a traditional mortgage on the new property and pay off the bridge loan.
The aim of every homeowner should always be to get permanent financing, like a traditional mortgage. The sooner the homeowners are able to get a mortgage on the property the better it will be for them. Hard money loans have higher interest rate than traditional mortgage, so it is wise to pay it off as soon as possible.
Refinancing with Subprime mortgage
For home and property owners with poor credit scores, subprime mortgage is the second best option.
Since their poor credit history won’t allow them to obtain a traditional mortgage from the bank, they can obtain a subprime mortgage which comes with higher interest.
However, the interest rates are still lower than hard money loan, which is why this option is the second best.
Selling the property
For fix and flip investors, selling the property is the best strategy. Not only do the hard money loans help with purchasing the property, it can also help the investor make the necessary renovation and improvement to the property so that it can be sold at a higher price.
This exit strategy can also be used by borrowers that have vacant or unwanted property in possession. This exit strategy is one of the most secure forms of repayment.
Refinancing with another hard money loan
This is not a favorable option, but in case the property owner isn’t able to obtain a mortgage and isn’t willing to let go of the property, the hard money loan can be refinanced with another hard money loan.
Another hard money loan can be obtained with the same property or with any other property.
If you are looking for a hard money lender in USA, contact us today on 1-800-514-7350 or visit our website for more information.