Commercial and residential loans are seeing a notable boom in business these past few years? Why is this? Because more and more Americans are returning to classic home models and want to make sure they’re getting the best deals possible. From being recently promoted in a job to starting a new family, the field of hard money lenders is only expected to get better from here. Preparing for this new wave of eager customers means becoming familiar with the ins and outs of the hard money loan and what it has to offer investors and borrowers. Whether you’re attempting hard money loans in California or simply want to know more about borrowing and buying rates, take a look below to get started.
What Is A Hard Money Loan?
Hard money lenders are in higher demand than ever before. This is due to the nature of a hard money loan and the benefits it offers people on both sides of the fence. Hard money is known for offering much higher interest rates and lower loan-to-value ratios than conventional options. For example, a hard money interest rate can start at 15% to 18% to even 20%.
How Long Do Hard Money Loans Last?
The duration of a loan is a major point of convention for many investors and brokers. Thanks to hard money loans, these rates are thought to change for the better. Since the majority of people buy their homes with either a 15-year or 30-year mortgage in place, home prices have seen an exponential increase over time. This has made the amount of equity people have increasing as they continue to get older. A private loan is generally shorter than a traditional loan, as well. The former can only last for five years, while the latter can go anywhere from one to 20 years.
Who Are Common Customers Of Hard Money Loans?
There are many different customers who seek out hard money lenders, though some have proven more common than others. Student borrowing, for example, has been increasing noticeably over the past few decades and shows little sign of slowing down. Between the years 2000 and 2014 the total volume of outstanding federal student debt has nearly quadrupled in number, surpassing $1 trillion and making loans change as a result.
What Other Benefits Are There?
With so much to do in the day, waiting is often low on the list for many. Hard money deals are frequently sought out not just for their reliability, but their quick turnaround rates. The average hard money loan will take anywhere from one to two weeks to fully process, making it highly appealing to those eager to get started on their way to securing a home. The typical bank loan borrower who wants to take out a business loan should be in business for at least two years and have good personal credit, among other factors.
Why Choose Hard Money Lenders?
Private money loans are highly attractive to investors. Since most hard money loans are secured by a property with either a 30% or 50% equity, the investor remains well-protected throughout the process. While the median amount of time for obtaining home equity for people below the age of 35 is $20,000 and more people prefer shorter loans than longer ones, it’s important to stay on top of trends as they’re prone to shifting at the drop of a hat. Consider this when working with a private hard money lender and you’ll never be behind the times.