A Guide to Hard Money Loans in Yonkers, New York
A hard money loan is a real estate loan that is used by investors. Many investors choose hard money loans for a number of reasons. If you are interested in taking out a loan in Yonkers, New York, then it can be helpful if you have an understanding of hard money loans.
Types of Hard Money Loans
When you apply for a hard money loan, you have different options that include:
A bridge loan is a hard money loan that enables an investor to purchase a property quickly with the intention to resell or refinance the property. A bridge loan is also for individuals who want to purchase a new property before they get funds for a down payment from the sale of another property.
These loans are for individuals who don’t quality for other loans and finance options. With an owner-occupied hard money loan, investors may be able to purchase real estate for themselves.
Fix-and-flip loans are for investors who want to purchase a property to make quick renovations with the purpose of selling it to pay off the loan.
Construction loans are for real estate developers who want to begin a new construction project. Usually, real estate developers who take out construction loans have a goal to refinance or sell the property quickly.
Hard money lenders are private firms that often consider each application on a case-by-case basis, and they are typically open to granting hard money loans to investors for numerous purposes.
How Does a Hard Money Loan Work in Yonkers, New York?
Most hard money lenders only give out loans to investors. Those who want to take out a loan to fund their private home may have to look for other resources. Hard money lenders only issue loans for a short time. In most circumstances, hard money loans are for a 12-month period. If you take out a hard money loan, you wont have to make equal payments every month toward the interest and principle. Most hard money loans require an interest-only payment. Typically, the loan is paid off in one balloon payment. This payment will cover the remaining interest, principle, and any additional fees.
Why You Should Consider a Hard Money Loan
Hard money loans in Yonkers, New York, offer a number of benefits. They offer increased investment opportunities. If you wait to take out a regular mortgage with a bank, then you may miss out on a good real estate deal.
They also offer flexible terms. Hard money loans are issued by private lenders. Unlike traditional banks, hard money lenders are able to develop customized loans that work to fit your needs. Hard money loans come with lenient requirements. With mortgages at banks, your credit score, debt-to-income ratio, and income will be taken into account. Hard money lenders don’t focus on these factors as much.
What are the Eligibility Requirements for Hard Money Loans?
Traditional banks look at your ability to repay the loan, but this isn’t the case with a hard money lender. Although hard money lenders are required by law to look at credit scores and income, the primary factor that determines eligibility is the value of the collateral.
Because collateral is the most important part of a hard money loan, lenders will want to see a full appraisal of the property. Furthermore, lenders may require a down payment, which is usually calculated by the current value of the collateral or the after-repair value (ARV).
Are you interested in learning more about hard money loans? We invite you to contact our team at Delancey Street. We can provide you with additional information about hard money loans in Yonkers, New York.