Hard Money Myths Dispelled
There is a lot of misinformation on the internet about a unique type of home financing known as hard money lending. Like any other type of mortgage, hard money loans are designed for a specific segment of borrowers, and they aren’t right for everyone. Unlike traditional home financing solutions, in which borrowers are approved based on their financial status, hard money loans are approved or not approved using the property being financed as collateral. In this week’s blog, we’ll discuss and dispel some common hard money myths. If you live in Tampa, Orlando, Sarasota, or nearby Florida, and you’re interested in learning more about hard money loans, contact Associates Home Loan of Florida, Inc.
Myth: Hard Money Loans are for Desperate People
Truth: It’s true that some borrowers choose hard money financing because, on paper, they may not qualify financially for traditional loans. While they are easier to qualify for, they have some other benefits that make them attractive even to borrowers in great financial standing. Some borrowers enjoy how quickly hard money loans can be completed quickly for fast cash and have less tape than loans offered by institutional lenders.
Myth: Hard Money Loans Have Much Higher Interest Rates than Traditional Loans
Truth: Some hard money loans do have higher interest rates than some traditional mortgages; however, there are many ways to mitigate these costs. Hard money borrowers who already have an established relationship with a lender, for example, may be able to get very competitive rates even compared with traditional loans. Since these loans are executed quickly, they can help borrowers who buy investment properties act quickly and start making money faster.
Myth: Hard Money Loans Do Not Require Cash Up Front
Truth: Hard money borrowers actually will need to put down a larger down payment for a hard money loan than for a traditional, conforming loans. Most hard money loans will only cover up to 65% of the value of the property, which means you may need to raise at least 35% of the funds yourself.
Get Started Today
With so many hard money myths out there, it’s easy to see why there’s so much confusion around this type of lending. When you’re ready to learn more about hard money loans and other financing solutions for your home or investment property, contact Associates Home Loan of Florida, Inc. Our qualified loan specialists will help you determine how much you can borrow and provide preapproval. We work with clients in Tampa, Orlando, and Sarasota, FL, so let’s get started today.