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Did You Know Hard Money Can Offer 30-year Fixed Financing?

Hard money loans have an extraordinary amount of benefits for people who want to foray into real estate investment. Hard money loans attract home flippers, owner-occupied residents, and business owners alike for their flexible terms and accessibility for those beginning in real estate. However, one thing borrowers may not know is that in certain cases, hard money loans can come in the form of 30-year fixed financing. For those looking to secure an owner-occupied loan, this can be an extraordinary way to utilize the benefits of hard money without the quick repayment period, allowing for more time to pay back the loan.


Hard Money Loans, What are They?


Hard money loans are a quick and accessible way to raise capital for real estate investment. Unlike traditional loans, hard money uses hard assets, or property, as collateral for the loan. This allows people who may not normally have the resources to obtain a traditional loan get help in qualifying for this form of financing. Along with this, hard money loans typically have a more flexible underwriting process, which grants borrowers more flexibility than traditional loans. This means that potential borrowers can secure funding at a much quicker rate, freeing up cash flow to purchase property or renovate distressed properties for fix and flip situations. These benefits make hard money loans an attractive form of funding for those with solid plans for utilizing the funds in real estate investment.


Hard Money: What the Borrower Should Consider


As with any loan, borrowers should be aware of how to successfully obtain a loan, and what stipulations may be in place for obtaining the loan. For example, hard money loans typically have much higher interest rates than traditional loans. This is because lenders are taking an extraordinary risk with these loan forms. However, this rate is dependent on the lender (for example, JMJ’s interest rates range from 7.5-9%, a competitive rate to conventional loans of 5.5% – 6.00%. Another thing to consider is that repayment plans normally occur at a much faster rate than traditional loans. Whereas the conventional loan has a 30-year rate, hard money loans range from 6 months – 2 years. However, a small number of lenders offer fixed 30 year  financing, which can be an extraordinary asset depending on why you want a hard money loan.


Hard Money Loans and Financing Options


Hard money loans typically act on a short-term repayment period. Typical hard money loans act in a 6-month to a 2-year repayment plan. This is helpful for lenders who want to be repaid in a timely manner from a risky loan venture and empowers borrowers to pay quickly and move on to other real estate investments. This quick turnaround is particularly helpful in terms of real estate investment as borrowers seeking to diversify their portfolio can do so much faster than typical loan sources. This is most beneficial for people seeking to flip houses for a quick profit.


However, there is an array of possibilities in utilizing a hard money loan. For example, owner-occupied properties where the borrower seeks to live in the home is an example of when a longer financing term may be attractive. For those seeking to reside in a property, hard money loans can be an advantage to those who may not qualify for a regular loan, or need cash fast in a competitive buyers market. In these cases, owner-occupied loans can be most helpful to secure properties, but it may be a challenge to repay it if not selling or renting part of the property right away. This is where 30-year fixed financing can be your greatest asset in terms of owner-occupied properties.


30-Year Fixed Financing? JMJ Can Help


If you are looking for an owner-occupied loan, and need a longer, fixed financing option, JMJ can help. Owner-occupied loans are limited to borrowers who will be the primary resident of the property. Unlike most private lending services, JMJ offers 30-year fixed financing, with no payment penalties, to all qualified applicants. There are no credit score minimums, payment penalties, or foreclosure or bankruptcy scenarios. Looking for fixed financing with hard money? JMJ Funding is here to help in your lending journey.


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