The Essential Hard Money Loan Resource Guide
Hard money loans, also known as bridge loans or bridge financing, have long been used by real estate investors to get their projects up and running. These short-term loans are typically used for fixer-uppers, renovations, or other needs that quickly take capital out of pocket. Understanding how they differ from traditional mortgage loans, what types of investments they’re appropriate for, and their benefits will help you make an informed decision about whether or not hard money might be right for you.
The following hard money loan resource guide, brought to you by the bridge lending experts at Mansby Capital, was specially crafted to ensure you have all the information you need to successfully get started on your real estate project!
1. How do hard money loans differ from traditional mortgages?
Hard money loans resemble conventional loans in a few ways; you will have to apply for the loan, get approved, receive funds, and repay the loan over a predetermined period of time. However, bridge loans generally require less and different documentation than traditional loans, which makes them quicker to obtain, and an excellent option for anyone looking to secure fast funding.
2. What types of investment are hard money loans typically used to fund?
Hard money loans are perfect for various real estate-related projects that might not get funding from conventional lenders such as banks. Real estate investors, house flippers, and business owners often opt for bridge loans to obtain fast capital to fund their investments and, eventually, refinance through a traditional bank loan.
3. Can I pay off a bridge loan early?
One of the many benefits of bridge loans is that they typically do not carry a prepayment penalty when paid off before the end of their term. In fact, paying it off early is seen as beneficial in most cases.
4. How much equity do I need for a bridge loan?
Homeowners are expected to have 20% equity built up before a lender will offer them a bridge loan.
5. How much can I borrow with a bridge loan?
Generally, you may borrow up to 80% of your project’s cost with a bridge loan, but no more.
6. What determines eligibility for a bridge loan?
First, you will need enough equity on your home to qualify for the new mortgage. Bridge loan lenders will also consider your existing debt — checking that you’re not overburdening yourself financially.
7. How long does it take to get funded?
Unlike traditional banks and other lending institutions, hard money lenders are known for providing rapid access to bridge financing. Conventional lenders typically have a long approval process requiring numerous application forms, documents, and lengthy wait times.
8. How can I find hard money lenders?
Hard money loans are a valuable resource for real estate investors who need to borrow funds. Hard money lenders are private companies that loan hard cash on real estate investments; their main objective is to build a relationship with their borrowers based on trust and full transparency to reach a successful deal. So, how does one go about finding a hard money lender? Here are some tips for finding the right one:
1. Find a selection of companies specializing in hard money loans.
2. Narrow down your options by reading reviews and referrals.
3. When selecting a lender, focus on competitive pricing, expertise, honesty, professionalism, and reputation.
4. Choose local; this will ensure your lender has valuable knowledge and insight into the local markets.
9. What is necessary to apply for a hard money loan?
You will need to meet a few hard money loan requirements before applying for one. For example, you must have sufficient personal assets and a stable income.
Bridge Loan Financing Tailored To Your Needs!
Mansby Capital is an established bridge loan company specializing in lending for multifamily acquisition, new construction projects, and residential rehabilitation. We understand the importance of speed when it comes to processing a loan for approval; no one else can provide you with a faster turnaround than Mansby Capital.
Contact us by completing the linked form or sending us an email at info@mansbycapital.com.