Frequently Asked Questions & Answers On Hard Money Loans Chicago
This BLOG On Frequently Asked Question On Hard Money Loans Chicago Was Written By Gustan Cho NMLS 873293
What are hard money loans?
- Hard Money Loans are non-traditional short term real estate loans that lenders base the underwriting on the asset or property rather than the creditworthiness of the individual borrower.
- Hard Money Lenders rely on the equity of the real estate so in the event if the borrower defaults on the terms of their hard money, they can foreclose on the property.
- The hard money lender like it when borrowers put down a large down payment on real estate purchases they are lending on because real estate investors are less likely to default on their loan obligations if they have skin in the game and have a substantial amount of down payment.
- Most hard money lenders will require 25% to 50% down payment on a hard money real estate purchase transaction.
Why Do Real Estate Investors Like Hard Money Loans Chicago?
Hard Money Loans Chicago has many benefits for real estate investors. Not all hard money borrowers are investors with bad credit. Hard money loans can be considered as loans of last resort for many but real estate investors with perfect credit and who are bankable also turn to hard money loans.
Here is why bankable real estate investors turn to hard money lenders instead of banks and traditional commercial lenders:
- Quick turnaround times; Most hard money loans can close in less than two to three weeks.
- Some hard money loans can close in a week.
- Limited paperwork: Hard money lenders do not require the massive amount of paperwork like banks and traditional commercial lenders.
- Time is money for many real estate investors and if there is a quick cash only deal on the table, these real estate investors can turn to hard money lenders for quick cash.
- Hard money loans are great for investors bidding at foreclosures at auctions or investors needing quick cash for investment properties needing quick closings.
Hard Money Loans Chicago For Investors Who Are Not Bankable
Real Estate Investors who are first time investors or those who do not have financials or have less than perfect credit can benefit with hard money lenders.
- Banks and traditional commercial lenders are strict when lending money to investors.
- Most banks and commercial lenders what to see good credit and excellent financials from borrowers they plan on lending commercial loans.
- Real Estate investors who are first time real estate investors or do not have good credit can get started with hard money lenders to start their investment portfolios.
- Many investors consider these loans as investment loans of last resort.
- Borrowers who do not qualify for bank loans may be forced to negotiate with a hard-money lender, who often are private individuals lending money.
- Hard money loans are more expensive and often have more terms than the standard mortgage backed by the federal government, Fannie Mae or Freddie Mac or portfolio.
Typical Borrowers Of Hard Money
Who typically gets such a loan?
- Borrowers who have bought a property and haven’t yet sold existing one, they may benefit with short term hard-money bridge loan.
- They are typically short-term bridge financing.
- Other users are homeowners with bad credit or self employed borrowers with equity in their properties who want to avoid foreclosure.
- Property flippers.
- Investors buying foreclosures or properties from auctions.
- No Doc Fix and Flip Rehab Loans with acquisition and construction financing.
- Rental Property Financing and Investment Property Loans.
- Self employed borrowers needing no doc investment property loans.
Real estate investors who need hard money loans can contact Gustan Cho at 800-900-8569 or text Gustan at 262-716-8151 for faster response. Investors can also email us at firstname.lastname@example.org.