Why You Need To Obtain California Hard Money Loans Rather Than Securing A Loan From A Bank
When you are a real estate investor, there are times when you will need quick cash, and at such times seeking bank loans might not be the best option, unlike the lending institutions which might take longer to approve your loan. Hard money loans refer to the funding that is done by the private money lenders California, and when out to seek financing, one will never be short of options. When seeking private loan lenders, there is the need to find out the reputation of the lender when you need finance for your real estate investment project. Here are some of the reasons why one needs to utilize hard money loans California when making investments.
One of the major benefits of California hard money loans is that they have fast approvals and thus an investor will have the chance to secure cash within a day or two after they have provided the lender with the needed documents. For one to secure financing from the private money lenders, they will have to convince the lender that the property has a good market value, and also the borrower will need to have at least 20% equity. One disadvantage of seeking financing from a bank is the fact that the loans from the banks might take a who month before getting approved and one getting the cash they need for their project, but in the case of hard money loans, one will get cash within a week.
Another benefit that can motivate the investors seeking to get cash for real estate investments to find cash from private loan providers is the fact that they will have a flexible repayment plan. In the case of private money lenders, one can seek a flexible plan by discussing with the lender, but in the case of getting funds from other institutions, one doesn’t have the same freedom. When you get cash from the private loan providers, you will have the chance to develop a personalized repayment schedule, but in the case of lending institutions, one will have to stick with the schedule provided by the banks.
Hard money loans won’t attract prepayment penalties. The hard money loans can be repaid even before the maturation date without one incurring a penalty. When you get money that is enough to clear the loan, it is easier in the case of hard money loans.
One of the major worries, when one is seeking to have a loan, is their credit history or credit score, but in the case of hard loans, your credit history attracts less emphasis. Loan approval is dependent on the value of the property rather than credit rating.