Why It Is Wise to Look for Professional Hard Money Lending Companies
Hard money lenders play a significant role in the real estate industry. When customers are turned down by traditional lenders, hard money lenders come to the rescue. It is an alternative source of financing that helps the borrower in many urgent situations.
Unlike conventional lenders like big banks or credit unions, hard money lenders keep their focus on the borrower’s equity.
Hard money lenders are not concerned about their financial condition. More equity in the property ensures less risk to a hard money lender. In other words, the borrower’s equity is the lender’s security. It assures that the loan can be recovered through a foreclosure sale. Most hard money lenders limit their loans to 60-70% of the value based on the asset type. Now, the question that comes to mind is why would a borrower use a hard money lender if they had substantial equity in a property. Let’s find it out why:
#1 – The Need for Speed
Many borrowers rely on hard money lenders because they don’t have the time to wait for a traditional bank loan. But finance is very urgent to complete their underwriting process. Due to the intense competition in the real estate market, sellers are more likely to accept offers with quicker closing dates. Less hassle, less headache. Hard money lenders help borrowers in such situations.
Hard money lenders in Los Angeles County can close the deal quickly. Their loan approval & releasing process is quicker than that of a conventional bank. The quick turnaround time is a viable reason for many real estate investors that seek financing from a hard money lender.
#2 – Flexibility
Hard money lenders in Los Angeles County typically provide more flexible terms. They offer more creative lending solutions. Because conventional lenders are less flexible when it comes to providing lending solutions for out-of-the-box scenarios. Hard money lenders in Los Angeles County give the Fix & Flip Loan and the Bridge loan in the form of a hard money loan. It allows real estate investors to refurbish or own a property
#3 – Poor Credit or No Credit
Another common reason that a Borrower uses a Hard Money lender in Los Angeles County is their bad credit history. This means they have an unfavourable credit record and minimum credit score. Hard money lenders normally grant the loan based on the collateral property. They are less concerned about the creditworthiness of clients.
#4 – Lack of Income
Many real estate investors or brokers do not have a home with a steady payback record. They normally pay the loan based on the income they earned on their deal. Big bank underwriters are challenged by this uniformity. It is why conventional loan givers step back to underwriting. The hard money lender in Los Angeles County understands their entire financial situation. They are more focused on the equity of the property. They won’t focus on the borrower’s entire financial condition. So borrowers with adverse financial situations prefer to go with hard money loans.
Conclusion
Real estate investment purchases and refinances depend heavily on hard money lenders. Although the cost of financing can be higher than conventional lenders, it offers certain advantages that conventional lenders can’t fulfil. All California Lending specializes in funding residential and commercial Fix & Flip, Construction, and Bridge Loans. As a direct lender, they offer high LTV ratios at below-market rates and can structure a loan around your specific need. Contact All California Lending today or visit their website at https://www.acalending.com/.
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