If you intend to expand your real estate investment and you don’t have cash left in your bank account, all is not over. There are private money lenders who finance different investors. Loans that come in form of hard money are greatly beneficial to those who operate real estate businesses. In fact, real estate investors who don’t have adequate credit scores to get bank loans find such loans appropriate. If you wish to take your real estate business to the next level, but you find money a problem, you should plan to secure Los Angeles hard money loan. If it’s your first time to go for alternative loans, get sufficient information on:
The interest rate they offer
In most cases, different individual lenders will fix different interest rates depending on a number of factors. You will come across lenders who give loans at an interest rate of 10% while others may increase it to about 15%. What you should find out is whether the interest spread annually payable monthly depending on your ability. This becomes a good chance for the investor to expand their real estate business without experiencing the long loan processes in the banks.
Loan payment period
Most of these lenders will ask the borrower to indicate the payment duration that is convenient to them. They spread their payment period from 3 to 12 months. What you need to understand is that the interest is higher when the payment period is long. If for instance you choose to pay the loan within 12 months, the interest rate will be higher than that of a person paying the same loan within 3 months. Just like with bank loans, you should expect the interest of the Los Angeles hard money loan to vary with payment period.
Although these private lenders consider the credit of the borrower, they are not as strict as banks are. While banks will consider credit scores of their borrowers, such private lenders check for collections, charge offs, foreclosures, and bankruptcies. They do so to assess the ability of the borrower to pay the loan they intend to borrow. Why the private lenders don’t mind more about credit scores is because their loans are collateral based. This means they consider the value of your property than your credit scores.
Duration of processing the loan
These private loan lenders encourage and fund investors to buy other investment properties. To facilitate this, the lender processes the loan quickly to help the borrower take advantage of the available opportunity. Once you are through with filling all the relevant loan forms, the lender can process the requested loan within 3 days. Borrowers with properties such as commercial projects or residential houses qualify for bigger loans even when their credit scores in the bank are low.
Most private lenders will expect you prove that you can repair your real estate business and still service your loan. You should also be ready to pay discount points that the lender requires before you receive the Los Angeles hard money loan. People who fail to satisfy these discount points find it hard to access this type of loan.