Using hard money loans to secure your next home.

 

– Use Hard money loans as leverage to secure your next home (fast, less qualifications but more money down)

 

The home buying process can be a stressful endeavor – especially when purchasing your first home. With financing options, qualifications, and competitive markets to think about, navigating each step can make home buying a daunting task. Depending on your financial history and buying circumstance, a hard money loan may be your leveraging tool to secure the property of your dreams. Read below to find out more about hard money loans, and how they can be your best asset in the real estate market.

 

Hard Money Loans, what are they?

 

Depending on your financial credit history, experience in real estate, or purpose for buying a property, a 30-year fixed conventional loan may not be the right fit in terms of home buying. Hard money loans are a quick, easy way to raise capital that can go towards a myriad of purposes in terms of property. Below are a few key components of hard money loans:

• Hard Collateral: Unlike traditional loans, which rely on things such as personal financial history that takes months to approve, hard money relies on the property as collateral for loans. This means that if the loan defaults, the lender receives the property depending on the region.

• Flexible Terms: As the hard money loan relies primarily on the property as collateral, this provides a gateway to borrowers who may not have the ideal credit score or financial history a conventional loan requires. This opens up the door for new home buyers, or those wanting to start investing in real estate. It is important to note that credit is still a factor and timely repayment can help one’s credit score.

• Higher Interest: As lenders are taking more risk in lending to hard money borrowers, there are higher interest rates that accompany hard money loans. However, certain private lending firms can provide an almost comparable rate to that of traditional loans. For example, JMJ Funding provides rates of about 9 – 10%, compared to traditional loans around 7.25% at this time.

• Quicker Repayment: Along with less stringent underwriting, hard money loans have a much quicker repayment period than traditional loans. Whereas traditional loans have 30-year repayment periods, hard money loans range from 6 months-2 years. This allows greater financial freedom to free up cash flow and devote it to other avenues as needed. The shorter repayment period is something to keep in mind when considering hard money.

 

Hard Money: Housing Asset

 

So how can hard money be a successful leveraging tool for securing your next home? In a competitive buying market, realtors are looking for the best, quickest deal they can make from applicants. With traditional loans, it can take months to get approved for a loan. By that time, the house may be off the market. As the hard money loan is a much more flexible option, it is easier to secure in a quick manner. The cash payment from hard money loans places an edge above the competition, making you a more viable candidate for the property. Utilizing these advantages can put you in a prime position to secure your next home.

 

JMJ Funding, your lending partner

Not all lenders are the same. When looking to utilize a hard money loan, it is important to be aware of the terms and come to a solid agreement with the lender. Avoiding mistakes is important for the successful use of a hard money loan. For premier lending experience, JMJ has over 30 years of private lending experience and can help you navigate your lending needs, from owner-occupied, flipped, or commercial properties. Let us help you in this journey to secure your next home.