What Are Hard Money Loans?
Hard money loans are short-term and fast-funding loans provided to you by a Hard Money Lender. Loan terms generally last around one year, and the loan is secured by real property or equity as collateral. Since hard money loan terms are for such a small amount of time, interest rates are high, usually around 9-15%. There are many types of hard money loans for different projects. For example, Fix and Flip Loans are meant for people who want to invest in a property, fix it up, and then sell it for a high profit. If you are tired of getting denied by major banks for loans or you’re tired of how long they take, a hard money loan might be your next best option.
Private Money Loans In Orange County, CA
Private Money Loans are another type of hard money loan. Like all hard money loans, they are short term, lasting roughly a year, and are used to secure real property. In addition, your private money loan is secured by real property – meaning that if you can’t make payments on time, the property being used as collateral will most likely be sold by the hard money lender so they can make their money back.
Fix And Flip Loans In Orange County, CA
Like we just mentioned, Fix and Flip Loans are meant for fix and flip project styles. Are you interested in fixing up a property and reselling it for a high price? This might be the loan type for you! Fix and flip projects are highly popular in Orange County, CA, because the place alone is home to over 3 million people (with more moving annually), and new homes on the market are absolutely needed. If you use a hard money loan to finance a fix and flip project, more than likely, you’ll have the property sold in the blink of an eye. This is perfect because fix and flip loans, like all hard money loans, are short-term with high-interest rates. Contact RTI Bridge Loans in Orange County today for more information.
Hard Money Loans In Orange County, CA
Hard Money Loans are the general term used to describe bridge loans, private loans, fix and flip loans, commercial property loans, etc. These all fall under the category of hard money loans, which are short-term loans secured by real property and delivered very quickly. Monthly payments are usually interest-only, and if repayment isn’t made at the end of the loan term, your lender will sell the collateral property to make their money back – same as any type of Hard Money Loan.
The Top Perks Of Hard Money Loans
Hard money loans are so attractive to people for many reasons, but one of the top perks is that you get to stray away from traditional bank loans and financial institutions. So, what’s so bad about banks? First, they make you jump through so many loopholes just to get the loan in the first place. Additionally, bank loans are long-term and low-interest, and they can take up to 2-3 months to put money in your pocket. Hard money loans are fast-funding, and lenders rarely check your background information since they are securing the loan with a collateral property.
The speed is another top reason why people opt for hard money loans. In fact, most Hard Money Lenders have an approval process that only takes minutes and a funding process that only takes a few days. Snagging a property in Orange County, CA, is so difficult due to bidding wars. With the speed of hard money loans, you’ll be able to grab a property with cold hard cash easily.
Lastly, Hard Money Loans fund projects that bank loans will typically deny you of. For example, Fix and Flip Loans will most likely never get funded by a financial institution because they are short-term, and they are uncertain. On the contrary, hard money lenders see fix and flip projects as a way for both them and the investor to make money fast.
Disadvantages Of Hard Money Loans
Most people who are looking into hard money loans already know what they are getting themselves into. With that being said, there are a few reasons why people opt out of hard money loans. The biggest disadvantage of hard money loans is the risk. All around, the process of using a hard money loan is risky for both the lender and the investor. You need to have a solid repayment plan, or your property will flop, and the lender will have to sell it to make their money back.
Another reason why people don’t like hard money loans is due to the high-interest rate. However, with a loan term of only six months to one year, you can expect ahead of time that interest rates will be high. Usually, depending on the area, loan interest rates sit anywhere from 9-15%.
The Different Types Of Hard Money Loans
Whatever project you are interested in, there is bound to be a hard money loan that will fit your needs. Whether you are looking to buy a new commercial property or you’re looking to fix and flip a project, contact RTI Bridge Loans today to learn about the different types of Hard Money Loans and how they can benefit your needs.
Fix And Flip Loans:
Made for fix and flip style projects, these loans are given out by lenders to investors who are ready to buy a property, renovate it, and then flip it for a handsome profit. These loans, like all hard money loans, are short-term with high interest and property used as collateral. In Orange County’s real estate, Fix and Flip Loans are extremely popular.
Bridge Loans are great for people who are selling their property and are wanting to buy and move into a new property. Just how it sounds, bridge loans ‘bridge the gap’ between selling an old property and buying a new one – also short-term and high interest.
Private Money Loans:
Private money loans are a type of hard money loan, given out privately from the lender to the investor and secured by real property. Private Money Loans are great for any type of project or real estate investment that an investor is looking to embark on. Private money loans are short-term, usually lasting between six months and two years, high interest, and secured by real property as collateral.
Contact RTI Bridge Loans in Orange County, CA at (562) 857-2285 for any questions or concerns you may have regarding the limitations of hard money loans.