When it comes to purchasing real estate, there are a few different types of lending options depending on your needs. For those who are interested in buying a property with less than perfect credit with the plans of flipping it for a profit, hard money lenders California is the best solution. This third party financing option offers a variety of benefits that are ideal for anyone looking for a short sale home. If you are considering his, here are three things that you should know.
1. It’s lending for property purchase. Unlike a personal loan, hard money lender California specifically lend for the purchase of a property with a plan. The lending is based on secured assets that the borrower has such as a new property. Typically, the lending amount will cover up to 80% of the total cost of the property.
2. Interest rates are higher. Because of the type of loan, this type of financing typically carries a higher interest rate. The two reasons behind this are that the loan is given to riskier endeavors and the terms of the loan are dramatically shorter than a traditional mortgage. Property purchased with hard money lending are most often planned to be resold in the immediate future making it possible to pay back the loan right away.
3. Money is not from a bank. Lending through this option is funded by third parties such as private lenders or private companies. These businesses or individuals typically have a vested interest in seeing a property thrive or in the vision that the buyer has for the property. If you can make them see your plan and potential sale time, then they are more likely to lend to you.
Homes or other types of properties which are typically in foreclosure can be saved through this type of lending as well.