The Benefits of Hard Money Loans in Massachusetts
You get immense benefits that aren’t usually available from large Massachusetts banks or lending institutions. Some of these benefits are:
- Minimum Conditions: Borrowers need to meet a few criteria to get approved. Banks have many conditions that must be met. These may include credit reports, income history, and credit score. This can lead to lengthy approval processes that may result in the borrower not being approved at the end. These loans, however, are very simple and straightforward. It is possible that an investor will be approved if the hard money lender determines that the borrower’s real estate investment target is a great deal and that the borrower has at least 20% equity.
- It is possible to get a loan approved quickly by using Quick Loan Approvals. This is a far better option than traditional banks and financial institutions which can take up to 3-4 weeks. A borrower can often receive approval and financing in less than a week, especially if the requested documents are submitted on time. Hard money lenders can approve loans quickly because they have a short list of documents to submit and are smaller than banks.
- Credit history: They will be more flexible with credit histories. Your credit history will be a major factor in determining whether you are eligible for loans from reputable financial institutions. The chances of a borrower being approved for a loan are significantly reduced if they don’t meet the bank’s strict criteria. Hard money loan Massachusetts lenders don’t care as much about credit history as they do about the asset’s value and the borrower’s equity. This is called “skin in play”. You have a good chance to get the loan as long as you and the lender meet their expectations.
- There are no prepayment penalties. A prepayment penalty would be assessed if you repay the loan before the maturity date. These fees can be avoided by choosing hard money loans. It’s easy to find a hard money lender who will lend you money, without any prepayment penalties.
Although hard money loans offer many of the benefits mentioned above, there are still some drawbacks. Hard money loans have the following disadvantages:
- Higher interest rates. Higher interest rates are common because the lender is taking on additional risk by lending to a property which isn’t bank-financeable and to a borrower who wouldn’t be eligible for a loan from a bank. This is an important consideration when considering whether to get a hard money loan.
- Shorter-Term Loan. A hard money loan is not possible if you need long-term financing. If you require financing for more than 12-18 months, a conventional bank might be a better choice.
It may be easier to apply for a loan if your Massachusetts real estate investment is located near you. There will likely be many lenders who are willing to lend them. You should research lenders before you rush to apply for every lender. CambridgeHomeLoan is lending all the cities of the Massachusetts including Boston, Worcester, Springfield, Cambridge, Lowell, Brockton, Quincy, New Bedford, Lynn, Fall River, Newton, Lawrence, Somerville, Framingham, Haverhill, Malden, Waltham, Brookline, Plymouth, Revere, Medford.
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