A borrower can have a hard money loan based on the value of the property other than their income or credit. Hard money lenders focus primarily on the value of the asset that is used as the collateral for the lending.
But what are they, really?
They are private firms or companies that can lend quick cash money.
While you can apply for a traditional loan for 15-30 years of duration, hard money loans are temporary alternatives that are used to acquire property before being sold. They are provided for the purpose of buying assets in retail, office, industry, and commercial space.
Why Are Hard Money Lenders Worth Considering In Austin?
There are many reasons why you can choose a hard money loan focused in the Austin area.
Quickest Funding Facilities
While conventional banks take a minimum of 30-45 days to finance a family residential loan and almost 60-90 days to finance a commercial loan. Austin’s reputed hard money lender lends their loan only within 5-10 days. Not more, not less.
Lends Money For Unfurnished Properties
Hard money lenders lend money for unfurnished properties as well. Traditional banks, both government, and commercial, will not allow loans for unfurnished properties.
Loans Are Not Based On Credit or Income
Traditional banks or commercial banks rely on borrowers’ credit score and their financial status. They would require borrowers’ financial details and personal information to accept a loan. Traditional banks will rather provide loans to people who have stable careers, like doctors, lawyers, government officials, and more.
So, if you are a beginner in real estate, chances are they might not grant you a loan. Here, hard money lenders play a great role. Several private money lenders will lend you money on the basis of the real estate asset. You are free to choose which one you are going to make into your collateral asset. They will provide you a loan purely on the basis of any asset value.
The Kind Of Property Qualify For Hard Money Loans
Properties that qualify for hard money loans are single-family investments, duplexes, triplex, quadplex, condos, multi-family properties, commercial properties, and mixed-use properties. You can keep any of them as an asset. You can even keep the property you are going to invest as your asset.
Duration Of A Hard Money Loan
Usually, you need to return your hard money loan within 12 months. However, some companies will let you set a return period of 36 months. You can also extend your term for up to 12 months.
You Can Easily Qualify For Hard Money Loan
You can easily qualify for a hard money loan if you are refinancing for refixing a home or purchasing. So, you will easily qualify for hard money loans for purchasing properties for business or commercial purposes.
Long-Term And Short-Term Rental Loans
Some lending companies will assist you through long-term and short-term rental loan programs. They will not ask for a lease to accept the proposal.
Austin has the most concrete real estate market in the United States. It has the highest population, and a lot of people are moving into Austin from other states. The reason why the real estate market is booming in Austin. Thus, you will find money, hard money lenders granting you loans.
Hard Money Loans In Austin Is Used For?
If you are investing in the property business in Austin, then you can opt for hard money loans. Here is the list of sectors where you can ask for hard money loans.
You can buy low cost properties that require repair and fixing. After you have furnished and fixed it properly, you can sell it in the real estate market at a high price. This is called flipping since the investors flip these homes for a profit after buying them at a low cost.
According to Attom Data, Austin is the best city for flipping houses as it ranks 48th in the United States for having a great flipping house market.
Purchasing Commercial Property
Hard money loans are helpful for marketers who are purchasing unique commercial properties. If you are investing in commercial real estate, you can also ask for hard money loans.
Apply For Construction Loan
You can easily finance the building of your new home with the help of a construction loan. You can pay the construction loan in smaller draws, but once you’ve finished with the construction, you can turn it into a traditional mortgage.
Make A Better Investment
If you are new in real estate, it is better to check all the possibilities prior to applying for a loan. You need to ensure that if you are investing in a flipping home, then it should reach a profit margin.
If you are applying for hard money loans in Austin, be sure that you will get it without any confusion. In Austin, most companies don’t charge any payment penalty for the loans and get it for 1-3 years of interest rates only. You will be able to invest swiftly in real estate even if you are a novice.