When applying for a loan, going through a private lender may be the preferred method for individuals who need to get a home quickly. Anyone who has gone through the process of trying to buy a home knows that a hard money loan may be a better option if they need to get and pay for the home quickly, or if they do not have a lot of other options. Everyone?s situation is different, but here are a few common reasons that individuals might choose to go for a private lender who can offer this type of loan rather than a traditional method.
Hard Money Loans Have a Quick Turnaround Time
Hard money loans are not an ideal situation for everyone who needs to borrow money for a loan. Those who do take this type of deal should be aware that the interest rates can be a great deal higher than a regular loan. This might be all the way up to 18%, and sometimes even more. However, unlike a traditional loan, a hard money loan is known for offering benefits that include a rapid turnaround time that is, at most, two weeks. This is usually easier for all involved, since the individual gets the loan quickly, meaning the bank is able to help them get started on the path to home ownership quickly, and more so than if they had used a traditional loan.
Private Lenders Offer Quicker Payback
Those who take out a traditional loan for a mortgage may find themselves taking 20 years or even longer to pay it off. This can be a long time to be responsible for a loan, and often it is not negotiable. In contrast, those who seek help from a private money lender will find that their loan is considerably shorter. At the most, private loans have to be repaid in five years. This will mean that during the time frame, the payments will be higher than those who sought out a traditional mortgage. In contrast, these individuals will be done with their payments sooner, and be able to start making their money work for them in other ways that do not include making house payments. For anyone who has a stable job, this is an ideal way to feel comfortable about the loan they are making, and pay it off as quickly as possible.
Private Lending Can Help Individuals Get What They Need Quickly
Although some people might put down private lending and hard money lenders as a quick fix, it truly is an option that will allow individuals to make the most of their finances and find a solution that works for them. From getting a home quickly, and without the hassle of waiting to be approved for a regular mortgage, to paying off a home so they can start planning for other needs and expenses, private money lending can offer a wide variety of options that aren?t available elsewhere. When making the choice to pursue private lending, these are important factors that those doing so should keep in mind.
Anyone who wants to get a home but doesn?t want to go through the process of a traditional mortgage, should consider the benefits of private lending. The process has a quick turnaround time, and there is less waiting in order to get the loan. This means the individual can get on the path to home ownership quickly. The loan is not as long as a traditional mortgage, so they can begin paying it off and be done within five years-a great decrease from 20, which is what most traditional mortgages are. Finally, this is a helpful option to choose when one does not have time to wait around in order to get a mortgage. Private lenders might require more in payments, but the result is well worth the price.