Which Type of Hard Money Lenders Is Best to Ask a Loan For?
Not many understand what hard money loan is; well in simplest terms, it is a specific asset based loan where the borrower gets funding and it’s secured by the value of parcel of real estate. Typically, hard money loans are issued by companies or private investors or individuals. The rate of interests is often higher compared to the traditional lenders as well.
Majority of the loans are usually used for projects that last for several months to even years. Truth is, it’s almost the same to bridge loan as it carries the same criteria for lending and cost to borrowers. One known difference for bridge loan is the fact that it refers to a commercial property or may be ready for transition and isn’t yet qualified for a traditional financing. When it comes to hard money however, it’s deemed not only as asset based loan but also, a distressed financial situation including bankruptcy, arrears on existing mortgage as well as foreclosure on proceedings occurred.
If ever you’re in need of loan, there are various types of hard money lenders that you can consider and following are some of them.
Number 1. Commercial banks – commercial banks are one type of lender you can turn to in the event that you badly need money. There are many lending programs that you can apply for in these banks and say that you have a traditional business setup, then you can apply for hard money loan on these financial institutions to grow your business.
Number 2. Mortgage banks – you should not disregard mortgage bank as your option especially if you need mortgage loans. What these hard money lenders do is lend cash needed to purchase a property. However, you must not be using this as your long term solution if ever you decided to push through. Oftentimes, the terms are short and you’ll need to come up with balloon payment right at the end of your term.
Number 3. Mortgage brokers – yet another type of hard money lenders that you can try your luck are mortgage brokers. They actually have countless of lending sources that may be used to get the best deal possible. With the help of such lender, you can buy the property that you need or want as they can help you secure the money for it.
Number 4. Finance companies – there are numerous finance companies that also double as hard money lenders. Regardless of the project that you need funding for, such finance companies can provide you the funds you need for it.
Number 5. Online lending companies – as a matter of fact, one of the best options available to you is lending companies online. Believe it or not, since it’s online, everything from the application to repayment can be done over the web, making things more convenient for the borrower.