Torrance, California is the ideal place to living in the Los Angeles area because of its close proximity to all the happenings in Southern California. Buying a house or any property in Torrance is an opportunity to enjoy everything that’s great about the area. Unfortunately, many banks and credit unions don’t see the potential to make monthly payments on property because of income, debts or a poor credit score. This can stop people from living their dream life in Torrance or make positive investments. However, a hard money loan may be the option to buying property in Torrance.

Hard Money Loans have Easier Requirements than Traditional Mortgages

A hard money loan is a type of real estate loan based on the value of collateral rather than a person’s ability to repay the loan. Thus, the loan is only for real estate. Also, it’s important to note that a hard money investor does look at specific things like credit scores, income and debts. However, the final decision is based on the value of property. The collateral is the property the person is putting up to secure the loan. Sometimes hard money investors agree to take other types of property as collateral.

There are various types of hard money loans. For instance, an owner-occupied hard money loan is for financing a mortgage for those who don’t qualify for other types of financing. A construction loan is for real estate developers to start their construction project quickly. They typically have the goal of selling the new construction or refinancing it quickly. Another type of loan is called fix-and-flip hard money loans. This is for customers who buy distressed property with the goal of flipping it for a property.

A Person Must have Money to Obtain a Hard Money Loan

Hard money loans require a specific amount of case to obtain. This requirement is based on the value of the property. The requirement is based on the After-Repair-Value (ARV) or Loan-To-Value (LTV). It’ will be a percentage of that amount. The lender will obtain the ARV or LTV based on a full property appraisal.

The terms of hard money loans are often more flexible than the traditional mortgage. Many hard money lenders will customize the terms of the loan to fit the individual’s finances. The loan will typically have a higher interest rate. Sometimes the interest rate may be higher than 15 percent. The most common length is 12 months. However, the life of the loan varies from two to five years. The last payment is a balloon payment. This means that the person must pay the entire balance of the loan and any remaining fees and interest.

Why People Seek Hard Money Loans

If a person has other financing options, in a buyer’s market or has a good refinancing plan set, they typically don’t need a hard money loan. However, a person who can’t get financing elsewhere will typically seek a hard money. Poor credit or no credit is another reason for seeking a hard money loan. Most people obtain a hard money loan because they need money fast. The process of getting a hard money loan is faster than a traditional loan. Sometimes it may take a few days to one week to receive the loan money.

Get Your Hard Money Loan for Your Torrance, California Property Today

Life would be a lot simpler if the one-size-fits-all, standard mortgage was available to everyone. Unfortunately, that isn’t reality. When people need more ASAP for a real estate purchase and banks won’t lend, a hard money loan is an option. Contact us for more information about getting a hard money loan today.