Worcester Hard Money Loans
Delancey Street is a trusted, reputable, and transparent Worcester Hard Money Lender. We understand that many real estate investors need loans for residential and commercial projects. Delancey Street is a hard money lender that services that state of Massachusetts, and believes in creative financing. Hard money lenders are individual investors, not retail banking institutions. They are people just like you. They have money to lend.
Because they are private lenders, they are free to set their own lending criteria. Rather than basing their lending decisions on rigid criteria, like credit scores and income ratios, hard lenders base their decisions on the deal. If the numbers for your project work, you get the loan. This means that you wont be held back by your credit profile!
Often, traditional banks try to keep their customers in a box. If a loan request doesn’t fit an exact criteria, they reject it. They do this because they approve loans based on formulas and guidelines. As you know, one side doesn’t fit all.
When you need money for a fix and flip, traditional lenders are often unhelpful. They hesitate to give loans based on the value of the property after the repairs are completed. They base loans on the present state of the property, and on the credit worthiness of the borrower.
For example, a traditional lender may be willing to provide a loan at 90 percent LTV. They use the current, before-repair value; therefore, if the property value is $100,000, they are willing to lend just $90,000. Unless you have a large amount of cash on hand, securing a loan through a retail lender does nothing to help you get the project done.
How hard money lenders can help
Hard money lenders use the after repaired value (ARV), instead of the traditional lender’s LTV standard. ARV differs from LTV because it allows the loan amount to be based on what the value of the property will be once work is completed. This means the money needed for a construction project can be included in the loan proceeds.
For example, a home’s current value may be $100,000. After the rehab work is complete, the value will rise to $150,000. This is the after repaired value. A private money lender will then be able to give a loan of 80 percent of $150,000, or $120,000. This provides the money needed to complete the repair or rehab.
Hard money loans provide short-term financing to get projects done. Once the project is completed, the borrower can then refinance the property into a conventional mortgage. Hard money loans are designed to be used for periods of 6 months to a few years.
The payments for hard money loans remain affordable despite their short terms because they are paid as a balloon payment. With a hard money loan, the borrower typically makes no monthly payments. In some cases, the borrower may be asked to make a payment solely on the interest. Then, the remaining balance comes due.
What to do if you need a loan
If you need a loan for a residential or commercial property – we can help. Delancey Street understands that getting a loan fast, can be the difference between winning – and losing – a potential investment property. Many of our team members are real estate investors themselves. Regardless of what your goal is, we are here to help. You begin the process by contacting us, and telling us about your project. Tell us how we can help, and what your goals are.
What we look for
Delancey Street cares about one thing exclusively: whether your project will succeed or not. Contrary to traditional lenders, we don’t care about your credit score. We care about how much money you need, how you’ll use it, and ultimately – how you’ll repay the loan in a set period of time. Once we get these answers, we can comfortably determine whether or not your loan makes sense.