Costa Mesa is a beautiful part of the state. It is a wonderful community to raise a family, and there are numerous opportunities here that are simply not afforded elsewhere in the country. If you already live here, you might be considering some real estate developments to begin assembling an investment portfolio with. When it comes to getting money for such a purchase, the process can be quite complicated. You might even discover that you do not qualify for a traditional type of mortgage. If that is the case, do not give up hope. A hard money loan is the type of financing solution that may just solve your problem.

Hard Money Loans Explained

This is a specific type of loan geared only for real estate. Many traditional lenders will not offer them, but lending firms such as Delancey Street do. When granted, the loan takes into account the value of your collateral, usually in the form of the practualtself, as opposed to your actually ability to pay back the loan.

It is important to know that there are quite a few types of hard money loans. Some of the more common include:

  • Construction Loan – This is typically given to a real estate developer who need access to money quickly in order to get a construction project off the ground. The objective of this type of loan is to either refinance or sell the finished structure as soon as possible.
  • Bridge Loan – With this type of hard money loan, you will be able to quickly buy a property that you want to sell right away or refinance. It can also enable you to buy a new piece of real estate today and then receive enough cash for the down payment once a property you currently own is sold.
  • Owner Occupied Loan – If you do not qualify for any other form of financing meant for a real estate purchase, this type of hard money loan can give you the money that you need to buy a property for your own use.
  • Fix and Flip Loan – This type of loan is for a real estate investor who wants to buy a property, fix it up, and then sell it as soon as possible in order to pay the loan off in full.

There are other types of hard money loans as well. You will just want to speak to a lender specializing in these types of mortgage solutions to see what is possible for you.

How They Function

First of all, keep in mind that hard money loans are typically only approved for investment purposes. You will not find too many possibilities to help fund a private home purchase, but they are out there. To find out if you qualify, you will want to talk with the specialists at Delancey Street to see what is possible.

What makes a hard money loan different from a conventional mortgage is the length of time that you will have to pay it off. The typical length of the loan is no more than a few years at most. The average is about 12 months. Another difference is that you will usually not need to make any payments against the principle during this time. Instead, you will either be asked to make interest only payments or nothing at all until the entire loan comes due in full.

There are several benefits to hard money loans when it comes to real estate investors. It is one of the quickest ways to achieve financing available in the market today. You can often have access to the money you need in under a week. The application process is simple and straightforward as well. Contact Delancey Street today to learn how hard money loans may work for you and your situation.