7 Advantages of a Private Money Lender
Are you looking to purchase or renovate a investment property but you are short on funds? There is a solution by utilizing a “private money lender” to fund your project. But before you get started, you should explore your financing options and ensure you work with the best lender who is fast, easy, and reliable.
Private lenders are some of the best options when it comes to closing on a rental property or fix and flip project. If you have no experience working with a private lender, you need to start educating yourself on the subject before finalizing which lender is right for you.
Here are the 7 Key Advantages you’ll get from a Private Lender.
Private Lenders Have a Short Underwriting List
One of the things that deter people from applying for loans is the endless amount of paperwork and time-consuming process to close. When compared to conventional lenders or banks, private lenders have very few requirements. In fact, all you need is sufficient equity in the property or a large enough down payment to provide an equity cushion for the private lender. Private lenders will also look at the cash flow of the property and your exit strategy paying them off but will not focus on your income or credit.
With very few underwriting requirements, you’ll have a much better chance of getting your loan approved with a private money lender. Whereas conventional Lenders have a long extensive list of underwriting requirement that make it almost impossible to close in a competitive market.
Private Lenders Offer Flexible Loan Terms
To get a hard money loan, you must consider different factors such as the loan fees, down payment requirements, and the overall interest rate. All these variables are negotiable if you choose to work with a private lender. A private lender can structure the loan to meet your real estate investing needs. You can shop around from one lender to another until you find the terms that suit your needs. This kind of flexibility makes these loans some of the best options in the market.
With significantly fewer loan requirements the closing process is quick and easy. You will gain access to quick capital which is competitively priced when compared to conventional lenders. Hard money loans are flexible, quick, easy and straightforward for both the Borrower and the Lender.
Private Lenders Allow you more control over the Closing Process
When working with a private lender, the real estate loan terms entirely depend on your unique set of circumstances. Most private money lenders offer long term loans or short term bridge loans of 1-2 years.
Both you and the lender are not subjected to heavy government regulation imposed on consumer based loans which significantly slow down the closing process. The lender decides on the suitable interest rate to charge, and you have the freedom to negotiate all the terms until you both reach a final agreement. You can take advantage of this to create a long lasting relationship with your private lender.
Low Credit Requirement and the Ability to Improve Your Credit
If you take a loan from a private lender, you are not subject to a high credit requirement. In fact, most private lenders do not focus on credit rather they focus on loan to value of the asset. Additionally obtaining a private loan will give you the chance of improving your credit score in the future by showing a documented timely payment history. If you pay on time, you increase the trust that other conventional lenders and private lenders have in you.
Having a high credit score increases your chances of getting another loan in the future.
Fast Loan Approval and Quick Funding
The speed at which your loan application gets approved and closes makes private lenders the best option for real estate investors. In some cases, it takes as little as one to two weeks for you to close on your loan and receive your loan proceeds. All you have to do is ensure everything is accurate on your loan application and request to get your property valuation and title ordered as quickly as possible.
Private lenders will consider things like your property, down payment, equity, and experience when working on the loan process. They also look at the exit strategy for the property and some cash reserves for the monthly loan payment. If all of these factors fit within their guidelines they will close quickly on the loan.
A Private Lender Finances Tough Projects
Private lenders are willing to finance projects that conventional lenders like banks will reject. For instance, fix and flip loans which require renovation prior to stabilization are turned down by conventional lenders and banks which do not want to incur the execution and stabilization risk. The fix and flip process involves a real estate investor taking a short-term loan to purchase a property, do the repairs, and sell or refinance. However a hard money lender or a private lender will take on this project with a real estate investor as their funding source.
Are you looking for a private lender with direct access to capital who is offering low rates, no income docs or minimum credit requirement, and the ability to close in 7 days?
If so, Capital Funding Financial is the perfect lender for you.
Capital Funding Financial is a family office fund which specializes in asset based private money loans on non-owner-occupied investment properties nationwide particularly in states such as Texas, Florida, California, Georgia, Massachusetts, New Jersey, Tennessee, North Carolina, South Carolina, and Virginia.
Current Loan Programs offered by Capital Funding Financial
RATES STARTING AT 6.99%*+ ON HARD MONEY LOANS,
RATES STARTING AT 5.49%* ON RENTAL INVESTMENT LOANS,
RATES STARTING AT 6.99%* ON FIX AND FLIP LOANS!
UP TO 80% LTV! UP TO 90% LTC!
NO PREPAYMENT PENALTY*
QUICK & EASY CLOSINGS IN LESS THAN 7 DAYS
NO VERIFIED INCOME DOCS REQUIRED OR TAX RETURNS NEEDED
LOAN AMOUNTS OF $100,000 UP TO 25 MILLION
LENDING AVAILABLE NATIONWIDE ON COMMERCIAL & SINGLE FAMILY NON OWNER-OCCUPIED PROPERTIES