Monthly Archives: July 2020

Help Me Choose Between A Mortgage Company Or Private Money Lender

Most applicants who apply for a hard money loan know they don’t qualify for, or even want a traditional mortgage.  This can happen because they need fast cash or they don’t meet the necessary credit requirements.  But what happens if you qualify for both options?  There are a number of benefits that come with getting a hard money loan even when you qualify for a traditional mortgage. These benefits are why so many people have started applying for the various types of hard money loans that exist. It is important to know what these benefits are before making a final decision either way.

Fast Funding Approval

One of the reasons that a lot of people are taking out hard money loans is that the whole process for getting them is much faster than with a traditional mortgage. If you want your money as quickly as possible, a hard money loan could be your best option. Many people get the funds they need through these loans in under a week, whereas a traditional bank loan could take up to a month. When you are looking into hard money lenders, you will want to find out how quickly each one can disperse your funds.

Flexible Payments & Payoffs

Private lenders offer a lot more flexibility with making payments than most banks. These lenders create customized loan plans so that the borrower can be in the best position possible for repaying theirs. If you take out a traditional loan through a bank, you will be required to agree to the terms they set. Consider a traditional mortgage company or bank lender before you get a private money loan. With a private lender, however, you will be able to negotiate a repayment plan that works well for both parties involved. The more flexible your repayment plan is, the better your chances will be of paying off the money you borrow on time.

Easier Approval 

A vast majority of banks require applicants to have good credit for them to get approved. Another one of the reasons that hard loans have become such a popular borrowing option is that private lenders don’t really care about applicants’ credit scores. If you have something like a foreclosure or bankruptcy on your credit report though, it could be a problem. Those who have bad credit and cannot get a traditional mortgage through a bank should at least consider this option.

Fewer Requirements

When you try to get a mortgage through a bank, they will take a very close look at your income history and many other things.  The underwriting department will also consider things that don’t really matter to most private money lenders.  They’ll look at applicable conforming loan limits and requirements that are set by Fannie Mae.  One thing that really matters to a hard money lender is the potential income generated by your property. The more valuable your property is, the better your chances are of getting approved.

No Prepayment Penalties

Those who take out a traditional mortgage through a bank will face some pretty hefty penalties if they pay off their loan early. You won’t have to worry about being charged anything extra if you pay back a hard moan loan before the due date. Those who run into some extra money and decide to pay off their hard money loan early will not have to worry about incurring any penalties or fees at all.

Things to Consider When Making Your Decision

While it is true that there are a lot of benefits associated with taking out a hard money loan over a traditional mortgage, there are some drawbacks. You will almost certainly end up paying a higher interest rate and other fees.  Case in point, most companies in the HardMoneyList database of lenders have posted terms that are much higher than traditional banks and mortgage companies. The rate that you pay will depend on the type of loan you get, but it will likely be higher than a loan you get from a bank. It is important that you take your own financial situation into account before choosing one option over the other. Hard money loans have a lot to offer for investors, but they aren’t right for everyone.

Are There Mortgage Loan Programs Available for Foreign Nationals?

This questions comes up more often than you would expect.  Many people come to our site because they were turned down for traditional real estate financing.  Some of those applicants were turned down because they don’t have an established relationship with this country.  That means they’re either new to the States or for whatever reason they haven’t been able to document a lengthy employment and credit history.  In that case their odds of There are mortgage loan plans that do exist for foreign nationals who want to buy a home. These loans offer some great borrowing opportunities, and it’s important that you learn as much as possible about them before going forward.

Credit is Not an Issue

Foreign national hard money loans do not require non-American citizens to have good credit at all. Those who aren’t citizens of the country obviously don’t have a credit score, so it’s a non-issue. Applicants, however, are required to submit detailed information about the property they wish to purchase and any other relevant information. These lenders take a close look at the potential income that will be generated by the property when deciding whether to approve applicants. The more potential value your property has, the easier it will be to get your loan.

Down Payment

While you might not be required to have a credit history or official documents to get a hard money loan, you will be required to make a down payment. The size of the down payment will depend on the amount you borrow as well as the lender. It’s always a good idea to ask how much you need to pay down to get the loan. Borrowers will put down anywhere from 20-30% of the total loan.

Paperwork Requirements

Applicants are more likely to get a private money loan if they can show specific documents. For example, it’s critical to provide paperwork that proves you are staying in the country for at least as long as the loan period lasts. This can be difficult for some people to do, but it will go a long way towards increasing your chances of approval. Find out the verification requirements for direct lenders before you sign a contract and make a final decision. By doing this you will be giving the lender peace of mind. They will be a lot less likely to view you as such a liability if they know you are going to be in the country for a while. You are required to show your passport to get a private money loan, so make sure you have it on hand. It’s always best to stay on top of the latest requirements when it comes to your ID and passport.   Please check out the most recent State Department Guidelines for photo ID and passport requirements.  You absolutely cannot get one of these loans without a valid passport as any lender or financial institution would need to verify your identity.

Benefits of Foreign National Hard Money Loans

There are lots of benefits associated with getting a hard money loan if you are a foreign national. These loans are given out by private lenders, which means that you won’t need to submit any documents proving residency at all. If your property has enough potential value and you’re able to put down enough money, you should be able to get your money fast. These loans are known for dispersing funds a lot faster than banks and other financial institutions.

Those who are not legal citizens of the country but want to purchase a home for the purpose of flipping it should make a point of exploring this option before making a final decision. Most hard money lenders in our list will work with anyone to setup a repayment plan. You should be able to work something out with a private lender so you can pay off your loan on time and without any issues.

Find A Company In Our List Of Hard Money Lenders

Some online lenders in the HardMoneyList database will work with Non US Citizens looking for fast funding.  As these companies are not held to the same regulations as banks, you need to choose the one you borrow from carefully. Same goes if you’re looking for a cash out refinance or commercial real estate loan.  When you take the time to research some of your lender options, you should be able to choose the right one to meet all of your needs. There are a lot of these lenders out there, and you definitely don’t want to rush into this kind of decision.

Paying Back Your Private Loan

Most private money lenders in our directory will allow 1-5 years to pay back the hard money loan you take out. One of the great things about these loans is that they usually don’t come with any prepayment penalty fees. This means that you can pay off your loan early if you can, and there won’t be any additional expense whatsoever. Keep in mind that you have to be purchasing an investment property to get one of these loans as a foreign national.