Allentown-Pennsylvania Hard Money Loans
If you’re a real estate investor that’s ready to take on more projects, you’re in luck. Our company provides hard money loans that are a great alternative to traditional financing methods. Whether you’re looking to flip houses or just need to purchase a property quickly with no or little money down, you’ll benefit from our services.
What is a Hard Money Loan?
If you’re unfamiliar with hard money loans, they’re a form of temporary financing that allows you to purchase an investment property with little or no money down. A bridge loan bridges the gap between the time it would take to qualify for permanent financing or another type of loan but need to act quickly. A rehabilitation loan allows you to purchase the property and obtain the amount you need to make the necessary repairs for resale. In either case, the loan term is typically from one to five years and is a stepping stone to making profits.
How is a Hard Money Loan Different than a Traditional Bank Mortgage?
Hard money loans are different from traditional financing methods in several ways. A traditional bank loan focuses on both the borrower and the property. A hard money loan focuses on both factors; however, there’s a much stronger emphasis on the collateral rather than the borrower. This means that borrowers without perfect credit and limited assets may still be able to qualify. We have many different loan programs that allow for flexibility in our lending. The focus on the borrower in a hard money loan is for the purpose of understanding the entire scenario. The collateral is given the most weight in this transaction. The current value, amount of work that needs to be completed, and the resale value of the property after the work is finished are the most important factors.
Since the value of the home is given heavy consideration with a hard money loan, a strong and recent appraisal are necessary. A home inspection is also useful to determine the overall condition of the property and to avoid any costly issues that may surface later in the project. A traditional bank loan would place a heavy emphasis on the borrower’s employment history, credit record, income, and assets. These items aren’t given as much consideration with a hard money loan.
The cost of a hard money loan is also higher than a traditional mortgage. Interest only and balloon repayments are often utilized with these types of loans. It’s important that the borrower have a solid exit strategy and that they don’t possess the property for any longer than necessary. The added flexibility and opportunity that’s presented with hard money loans make it a worthwhile investment for many developers.
Traditional mortgage loans also take a much longer amount of time to process and fund. Weeks if not months are common with these types of loans. With a hard money loan, the entire process can typically be completed within one week providing all conditions are met.
How Do I Apply for a Hard Money Loan?
Applying for a hard money loan is easy. Our company provides you with an online application that takes only a few minutes to complete. You’re also able to get in touch with us by phone if you’d prefer. We’ll review the request and issue you a pre-approval as quickly as possible. The loan representative will review all your options and explain exactly how to complete the process. After submitting all the requested documentation, you’ll be scheduled for funding. You’ll be able to review the disclosures and ask any outstanding questions you may have. See how we’ve helped so many other real estate investors just like yourself in Allentown. Give us a call or apply online to get your hard money loan pre-approval, today!