What are hard money loans?
A hard money loan is financing acquired through the collateralization of a "hard" asset, most commonly real estate. The security instrument of a hard money loan is a mortgage. However, obtaining a hard money loan mortgage has many benefits relative to a traditional loan for real estate investors. Understanding the differences between these financing options and the role they play in acquiring and leveraging real estate is a key factor of success for an investor.
Advantages of a hard money lender
Borrowing from a Rochester based private lender like Webster Capital gives you an advantage in the marketplace. Borrowing hard money is fast and easy because we are not restricted in the way traditional lending institutions are. Our loans are approved based on the value of the asset, which is why hard money lenders are also commonly referred to as "asset-based lenders."
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This means that borrowing hard money loans is fast and flexible.
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We require no credit check
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Hard money loans allow for greater liquidity
Tips for getting a hard money loan
When choosing a hard money lender, it is important to weigh a number of factors. There have been a number of national companies that have to come to market with loan products for investors that were traditionally private and regional. When making the decision on who to borrow from it is always best practice to find somebody who understands your market. This enables fast approval and easy communication with your hard money lender.
Don't overlook the details of your agreement.
The smaller details of your loan are typically what will determine your success and strategy. Consider asking yourself these questions:
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Does the hard money lender have penalties or create contingency risks in my project?
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How fast can I get funded and get the draws I need to keep my project on schedule?
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Can I rely on my hard money lender to perform consistently as I grow or as market conditions change?
The answers to these questions are vital to your success. As the market for hard money lending has become more competitive, many lenders will entice you with lower rates, only to charge fees that borrowers overlook to increase their rate of return. Appraisal fees, draw fees, prepayment penalties, discharge fees, statement prep fees, underwriting fees, and extension fees will all compound to increase the overall rate of your hard money loan. Do not fall victim to these tactics. At Webster Capital, we have been providing simple, honest, and transparent hard money loans to the Rochester community for over 25 years. We are the most experienced and qualified hard money lender in Rochester! See our Hard Money Loans FAQ section for more!
Getting started with a hard money loan
“Hard money” financing has long been a popular option for real estate investors who don't have time to wait for traditional bank financing. These loans are specifically designed for real estate investors looking to get funded quickly.
When you're in the market for a hard money loan, there's no need to go at it alone. With help from your local hard money lender, you'll find a stress-free way to finance your next flip. If you've never used a hard money lender before, you will be pleasantly surprised at how fast and easy the process is! If you are looking for a hard money loan in Rochester, we'd love to talk about your project. Contact us today or apply online.