Hard money loans are the most misunderstood loans on the market, but they can be incredibly helpful to most borrowers. At Save Financial, we offer the most competitive rates and fees on our hard money loans to help you reach your financial goals.
Many people aren’t aware of the many uses hard money loans have, so we’ve uncovered the top uses for you to consider this financing option.
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Buying an Investment Property
Securing financing to buy an investment property can be hard. Traditional lenders have tough restrictions making it harder to get qualified. Unless you have a large down payment, perfect credit, and no debt, you will have trouble finding a traditional loan.
Hard money loans, though, don’t focus on your qualifying factors. They focus on the property’s qualifications. As long as there’s enough collateral in the home, you can get qualified to buy an investment property and earn money by renting the home out.
Buy a Fix and Flip Property
Fix and flip properties are usually in disarray and don’t pass a traditional appraisal. That’s because fixer uppers are sold for less than they’re worth but because they need so much work. Traditional lenders won’t fund the purchase unless the home is livable right away, which usually isn’t the case.
Hard money loans can fund a fix and flip property though. You don’t have to worry about the house not passing the appraisal. As long as the after-repaired value as determined by an appraiser is high enough, you have a good chance of getting approved. You might even have enough funds to buy and renovate the property. If you sell it fast and pay off the loan, you can walk away with a nice profit.
Refinancing to Save your Home
If you’re having financial trouble and can’t make your mortgage payments, you might use a hard money loan to refinance and save your home. Because hard money loans don’t focus on your personal qualifying factors, they’re easier to get. This gives you a chance to get caught up, fix your credit and then refinance again into a standard loan.
Building a New Property
If you’re thinking about building your own home, you need a construction loan. This isn’t a mortgage since there isn’t a house to use as collateral. The money from the hard money loan pays for the land, building materials, and labor and is disbursed in phases according to the contract and timeline the contractors created.
Once the home is built, you must refinance the hard money loan (paying it off) with a traditional mortgage.
Final Thoughts
Hard money loans are more useful than most people realize. They help you realize your real estate dreams without needing perfect credit or a huge down payment. When you use the right lender, they can be a great way to build your real estate portfolio.
If you’re curious about how hard money loans can help you, contact Save Financial today. We can talk to you about your goals and help you understand how our loan programs can help you!
