Hard Money Loans for Real Estate Investing

A hard money loan has pros and cons to carefully consider before you apply for or accept any money to fund real estate investments, though most people agree they offer a sound solution to large financial transactions that might not otherwise be possible without the cash. The loan solution has been around for several years now and many people around Sacramento and beyond have taken advantage of them over this time. Perhaps this is a loan type that can help you get your foot in the door of the real estate market.

A hard money loan is provided by a person rather than from a bank or other financial institution. So, obtaining the loan is much different than what you’ve come to expect from the other lenders. You won’t complete the same applications or credit checks to get approved for a hard money loan. The value of the property that is being purchased is one of the biggest criteria used to decide if a loan is given as well as the value of the property once renovations are made. However, private lenders are free to use their own criteria to decide whether they’ll provide a loan.

hard money loans sacramento ca

As mentioned, there are advantages and disadvantages offered when using hard money loans sacramento ca. The biggest disadvantage is the cost of the loan. Borrowers pay hefty fees for using hard money loans, with rates as much as 10x more than a traditional loan. This amount does vary from one lender to another so keep eyes and options open when searching for a provider. You also have a shorter repayment period so the money is repaid in a faster time period. On the upside of things, the hard money loan is convenient, flexible, and no additional collateral is needed.