Most people who apply for a mortgage these days face challenges because of the strict requirements imposed by financial institutions. People who are unable to qualify for traditional mortgages can choose to get financing from a private lender. Private loans for buying real estate, also known as hard money loans are offered by ordinary citizens. In order to find Atlanta private lenders for real estate, investors may join a real estate investment club or request their relatives or friends to refer them to such lenders.
Hard money loans can be a great option when you have not been able to qualify for a conventional mortgage due to a poor credit history or if you are a self employed person who cannot provide proof of a steady income. These loans are secured by the property you want to buy. Therefore, you can get a loan if the property shows a likely profit.
The repayment period for hard money loans is much shorter than that of conventional mortgages. The reason for this is that the lenders seek to get quick returns on the money they have loaned out. The loans are set up to be repaid within a few months or years.
There are several reasons as to why it is convenient to get a real estate loan that needs to be repaid within a period of two years or less. It can be convenient if you wish to sell the property after a short period. The financing will allow you to buy a property and make a profit by selling it.
You may also apply for a hard money loan if you expect to qualify for a conventional refinance a few months after acquiring the house. Applying for such a loan can also be a good idea if you plan to carry out renovations that will increase the value of the house. You can then sell or refinance the property.
When planning to complete extensive remodeling projects, getting a hard money loan is a wise. This is because it can be difficult for property owners to qualify for a mortgage even if they have good credit scores. Private lenders can give them the loans they need to get a property in the best condition so that they can sell it and make a profit.
The approval process for hard money loans is also shorter. The lenders usually approve them within a few weeks instead of thirty or forty five days, which is the norm for conventional mortgage loans. Most investors find it convenient to have their loans approved fast, although they will pay a higher interest rate. Private loans for real estate have a higher interest rate because anyone can qualify for them regardless of his or her credit score.
Tom G. Honeycutt is a full-time real estate entrepreneur in Atlanta, GA. Tom helps readers by providing practical and useful knowledge to better understand lending choices. If you are looking for Hard Money Lending options in Atlanta he suggests you click here to learn more.