Financial loans, especially those related to property, were traditionally the purview of banks and larger financial institutions, and subject to strict borrowing conditions. These days, the field of money lenders has diversified, and there are more choices for Californians looking for a loan to invest in residential or commercial real estate, to renovate, secure a 2nd mortgage on an existing dwelling, prevent foreclosure, and for many other property-centric purposes. Here’s some of the circumstances under which might you want to eschew the big banks and head to a hard money lender instead.
If you’re an American with a less than stellar credit rating, you’re not alone. In fact, it’s estimated that around 68 million people in the US have what would be termed bad credit. In California, debt statistics are consistent with national averages for most categories. However, there’s one area in which Californians owe more than the average American, and that’s mortgage debt. House prices for a single level dwelling in the state experienced more than a two-fold increase from 2008 to 2016. Skyrocketing real estate costs have pushed the traditional bank brokered mortgage out of reach for many.
As conventional banks operate under tight regulatory restrictions, their loans process is a complicated and often time-consuming process, which can result in rejection. So called hard money lenders, are private firms offering secured loans. A hard money loan requires real estate or property as collateral. If the borrower defaults on the loan conditions, the lender can seize their property in order to recover the loan funds. As it’s measured against assets rather than a borrower’s proven ability to furnish future repayments, it can be a useful option for people who have a bad credit rating. In a real-estate industry where properties can be transacted at lightning speed, another strong advantage of a hard money loan is that it can be pre-approved in a very short time frame.
Equity is key in securing a hard money loan. As long as you have assets you can qualify for a hard money loan, even foreign nationals can apply. There are loans suited to a wide variety of property related purposes, including residential rehab loans, used to renovate a premise either for future rental purposes or to flip it. There are also short-term bridge loans available that can be handy for people who are in the process of securing longer term financing with a conventional lender. Hard money loans can also be applied to the purchase and renovation of distressed properties, and to multiple other situations involving both residential and commercial real estate. If you’re a resident of Sherman Oaks or the surrounding areas, and you’d like to make enquiries as to whether a hard loan may be suitable to your circumstances, contact californiahardmoneydirect.net.