Hard Money Loans
A person may find themselves in need of money. They may need to pay down bills or may need to take care of other expenses. A hard money loan can help. This loan is a loan that is taken out for a short term and is secured by real estate. The loan is granted by private investors instead of banks.
A person usually has a year to pay the loan back but this time can be extended. A person will need to pay interest and some principal back each month until the loan is paid off. The amount of money that can be borrowed for the Nashville hard money loans depends on the value of the real state.
Eligible Property Types
The exact property that is accepted for the loan will be up to the lenders. Some common property types are acceptable to put up for this type of loan. A borrower can put up a single-family home, multi-family units, commercial buildings, land, and industrial buildings.
In most cases, the lenders will require that the property is unoccupied. If the owner is living in the home there are additional rules and regulations they must follow and many lenders do not want to get involved.
How to Use the Loan
Hard money loans work for some situations better than others. A person may want to use this type of loan if they are going to purchase a property and then sell it.
They may use the loans to purchase land or for construction purposes. They may also use this type of loan if they have past credit issues and are looking to make a purchase.
Who Benefits from this Loan
These types of loans are often used by real estate investors that need the money quickly and cannot wait for traditional loans. In most cases, a person will be able to get their money within a week. The application process only takes two days at the most and some loans can be approved the same day.
If a person is trying to purchase investment property quickly they need this loan to close the deal. People that cannot get loans from banks also benefit from hard loans. They may need to get the money due to short sales and foreclosures which banks may not fun.
They may also have credit issues where they cannot get approved for a loan by the bank. A person may also need this money if they cannot get a bank loan due to starting a new job and if they have insufficient history. The lenders for hard loans can often look past this and improve the loan on the property.
The interest rates on the hard loans will vary between lenders and the location of the property. The lenders are taking a bigger risk with these loans and the interest rates are going to be higher to reflect this risk.
The average interest rates are usually between 10 and 15 percent of the amount borrowed. This amount will also vary based on the value of the property being used as collateral. The lenders will also look and see if the borrower has the money to pay back the interest on the loan.
A hard money loan can help a person get the funds that they need in a short amount of time. a person can have the money within a couple of days and will have at least one year to pay it back to the lenders.