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Albuquerque Hard Money Loans
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A hard money loan is a unique type of loan our company is now happy to make available to our real estate investors in Albuquerque. This loan places an emphasis on collateral rather than income, assets, and other factors typically associated with traditional financing and bank loans. This means that investors have a much easier time obtaining an approval. Our company is also able to approve these loans within days, not months. Faster funding times can be the “make or break” factor with any type of real estate transaction. Don’t leave it up to chance, get in touch with us for a hard money loan in Albuquerque and make your project a reality, today.
How is a hard money loan any different than any other loan?
As previously noted, hard money loans take the entire picture into account. Rather than basing their decision on a credit score, they consider the undertaking of the project and how it would be mutually beneficial to the company and the borrower. With this type of outlook, more loans can be made based on profitability rather than history. Getting a borrower with credit blemishes back on track also benefits them in the future. They’ll be able to qualify for a myriad of programs that will provide limitless opportunities. Also, the speed that the loans are underwritten and funded are improved considerably. Being able to move quickly means more won bids, faster completion times, and the opportunity to establish a solid reputation with buyers and the businesses that Albuquerque real estate investors transact business with.
What is needed to apply for a hard money loan in Albuquerque?
At the bare minimum, a property must be selected. It’s also helpful for our investors to anticipate any issues that may arise ahead of time. Properly documenting any questionable items and having explanations prepared is significantly helpful. Business and personal financial statements such as assets and income are also helpful. The more information that’s available upfront can cut underwriting and processing times. Also, having a solid game plan and any additional information regarding the property shortens the entire process. Avoiding any property that’s owner-occupied and having any “red flags” is crucial.
What are the acceptable types of properties that a hard money loan can be used for?
Land, lots, non-owner-occupied dwellings, and multi-unit properties are some of the most commonly used collateral for a hard money loan. House flippers and those looking to rent properties are also common borrowers. If the intention is to make a profit, a hard money loan can be a reasonable and viable solution. The loans are typically able to be converted into construction and permanent loans at the conclusion of their term. Since a hard money loan is intended to be a short-term solution, the length of the loan is typically two years or less. At that point, the investor must either convert, refinance, or payoff the loan amount.
Where can I get more information regarding hard money loans?
Since the loans we provide are highly customized, getting in touch with us for a hard money loan in Albuquerque is the best place to start. You’ll be able to speak with a dedicated professional and discuss your scenario. They’ll give you a quick pre-approval and go over all the specifics of the loan and any other options you may have. For more generalized information, Wikipedia is a great place to check. The specific article can be located by visiting https://en.wikipedia.org/wiki/Hard_money_loan. Investopedia also offers a great article that highlights the features and benefits of hard money loans. The article can be located by visiting https://www.investopedia.com/articles/wealth-management/040216/using-hard-money-loans-real-estate-investments.asp.
I’m ready to apply, what do I do now?
As previously mentioned, getting in touch with one of our dedicated hard money loan professionals in Albuquerque is the first step. Having as much information available as possible is also helpful. Having a pen and paper in hand is helpful for writing down all the options and details. Before you know it, you’ll have the funding you need for your next project. Give one of our professional loan representatives a call and get all the information you need and your pre-approval, today.
People know that the usual place to get a loan is a bank or credit union. The problem with such traditional lenders is that the approval process can take time and delay closing on properties. Real estate investors who are trying to flip properties can lose deals they find if they have to wait for loan approval through traditional lenders.
After the Great Recession of 2008, bank lending also tightened up a bit, making it more difficult for small businesses and real estate investors to qualify for traditional loans. This is when Lending Tree reports there was an increase in hard money business loans.
According to Fundera, traditional loans, especially real estate loans are for long periods of time. Hard money loans are based upon collateral and are designed to be for shorter terms, such as for one to three years. This allows real estate investors to do their repairs and refurbishment in a short window of time, then flip their properties.
The reason that hard money loans can be approved so quickly is that the loans tend to be approved based more upon the collateral (in the case of house flipping, the house and the property value), rather than being based upon the credit worthiness of the borrower. This also makes the application process quicker because the lender requires less paperwork in the application.
Because hard money loans are short term, they are riskier loans for the investor. For this reason, investors usually will only fund 70 percent of the value of the property. They want the borrower to be exposed to enough risk to have them be vigilant and committed to making the payments. If the borrower cannot repay the loan, the hard money lender will take possession of the collateral.
Reasons for Using a Hard Money Loan –
According to TheBalance.com hard money loans are not for every loan situation. They are not for situations where the borrower expects they will live in the home or on the land they have purchased. Such a situation requires a longer term loan. Hard money loans can have higher interest rates, sometimes double digit interest rates, due to the risk. One has to remember that there will often be an appraisal fee of around $300 to $500 and that a lender fee in points will also be a part of the loan package. For this reason, hard money business loans need to be approached with care for highly specific situations on the part of borrowers.
When Speed of Closing is Necessary –
Hard money loans are desirable when there is a need to close quickly. An example would be a situation in which there may be multiple offers on one property. Hard money loans can be closed in days, not weeks or months, when the property does not have issues and the borrowers get their ducks in order quickly.
When One Needs a Customized Repayment Timetable –
Since hard loan lenders are private investors, and do not have to follow outside guidelines or dictates, they are able to construct repayment schedules that can meet the needs of the borrower’s situation.
When Approval from a Traditional Lender Might Not Happen –
Again, the private hard money lender is mostly, but not exclusively, looking at the value of the collateral and less at the borrower’s ability to repay, so hard money loans are often easier to obtain for real estate investors who are trying to flip desirable properties.
Where to Get a Hard Money Loan –
One great resource is the list of the best hard money lenders for 2019 created by FitSmallBusiness.com. FitSmallBusiness is an online resource for small business owners. For each hard money lender recommended (seven in total, out of the 20 reviewed), they provide the lender’s rates, terms, qualifications, a description of the application process, and reviews. This is an excellent resource and overview for anyone who has a desire to seek a hard money loan.
Fitsmallbusiness.com also has a directory of for the entire state of California, if you want to focus upon local lenders. For each hard money lender in the state, 12 pages’ worth, there is a profile that they have written about that lender.[flexy_breadcrumb]