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? Several benefits 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 essential to know these benefits before making a final decision either way.

 

Fast Funding Approval With Customized Loans

One of the reasons many people are taking out private money loans is that the whole process of getting them is much faster than with a traditional mortgage. If you want your money quickly, a hard 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 in making payments than most banks. These lenders create customized loan plans so that the borrower can be in the best position possible to repay theirs. If you take out a traditional loan through a bank, you must agree to the terms they set. With a private lender, however, you can negotiate a repayment plan that works well for both parties involved. The more flexible your repayment plan is, the better your chances of paying off the money you borrow on time.

 

Easier Approval With A Non Traditional Private Lender

Most banks require applicants to have good credit to get approved. Another one of the reasons that hard loans have become such a popular borrowing option is that private lenders don’t 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 From A Private Money Lender

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 matter to most private money lenders. They’ll look at applicable conforming loan limits and requirements set by Fannie Mae. One thing that 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. Your lender wants to make sure they can recoup the invested funds if, for whatever reason, you miss payments or fall behind on the mortgage obligation.

 

No Prepayment Penalties For Customized Hard Money Loans

Those who take out a traditional mortgage through a bank will face pretty hefty penalties if they pay off their loan early. You won’t have to worry about being charged extra if you repay 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 Financing 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 pay a higher interest rate and other fees. Case in point, most companies in our featured database of hard money 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. You must consider your financial situation before choosing one option over the other. Hard money loans have much to offer investors, but they aren’t suitable for everyone.

 

This question comes up more often than you would expect. Many people visit our site because they were turned down for traditional real estate financing. Some applicants were turned down because they didn’t have an established relationship with this country. That means they’re either new to the States or, for whatever reason, haven’t been able to document a lengthy employment and credit history. Mortgage loan plans exist for foreign nationals who want to buy a home. These loans offer great borrowing opportunities, and you must learn as much as possible about them before going forward.

 

Credit is Not an Issue For Foreign Nationals Who Need A Private Money Loan

Foreign national hard money loans do not require non-American citizens to have good credit. Those who aren’t citizens of the country don’t have a credit score, so it’s a non-issue. Applicants, however, must 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 have a credit history or official documents to get a hard money loan, you must make a down payment. The down payment amount often depends on your loan amount and the lender’s criteria. 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. Down payment assistance is possible in some situations, so look around and compare the different options.

 

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, but it will greatly increase your chances of approval. By doing this, you will be giving the lender peace of mind. They will be less likely to view you as such a liability if they know you will be in the country for a while. You must 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 regarding your ID and passport. You cannot get one of these loans without a valid passport, as any lender or financial institution must verify your identity.

 

Benefits of Foreign Private Money Lending

Many benefits are 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 can put down enough money, you should be able to get your money fast. These loans are known for dispersing funds faster than banks and other financial institutions.

Those who are not legal citizens of the country but want to purchase a home to flip it should explore this option before making a final decision. Most hard money lenders on our list will work with anyone to set up a repayment plan. You should be able to work something out with a private lender to pay off your loan on time and without any issues.

 

Find A Foreign Company In Our List Of Hard Money Lenders

Some hard money lenders in our database will work with non-US citizens looking for fast funding. As these companies are not held to the same regulations as banks, you must carefully choose the one you borrow from. The 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. Many of these lenders are out there; you don’t want to rush into this decision.

 

Paying Back Your Loan From A Foreign Lender

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 prepayment penalty fees. This means you can pay off your loan early, and there won’t be any additional expenses. Remember that you must purchase an investment property as a foreign national to get one of these loans.