COMMON MISTAKES TO AVOID WITH PRIVATE HARD MONEY LOANS: 3CALoan
When you didn’t get the loan from the traditional bank you can try private hard money loan. From last 10 years, the hard money lenders have risen 50%. There are many situations where your loan application might be not get approved by traditional loan lender. The situations are when you have bad credit, property risks, or any employment issues. In these type of situations, private hard money loan lender will be best for you. Private hard money loans may be a good choice for you even if you haven’t purchased the property. You can opt for private hard money loans while purchasing a property.
If you are planning to buy a home long before you need the home then you can try the traditional loan process. But when you find a great property unexpectedly then you have to make the purchase fast before someone else will purchase that. You will need the money fast to make an offer to the seller. If you need money fast then private hard money loan might be the only good option for you. In this article, we will discuss some common mistakes which you can avoid while opting for private hard money loans.
Not Getting PRE-APPROVED Before Signing the Contract
When you are thinking to do a large financial investment, it will be good for you to get pre-approved for a loan. You should not invest without getting pre-approved for a loan although many people sign a loan contract before getting their loan pre-approved.
Pre-approved is the process where you have to consult regarding the investment with a trusted lender like ARC Capital. By getting pre-approved, you will get a proof of funds letter to really fix the deal. And this letter will make sellers believe that you are serious about the deal.
If you will fail to do this, it could cause many problems for you. Imagine the seller accept your offer which you made on a property, only to then have your loan request rejected. This is one of the problems which nobody wants to face. Getting pre-approved is a very simple process. There is no obligation that if you get pre-approved then you have to move forward with the loan.
Being Unaware of Any Additional Costs, Fees, OR Penalties
While signing a deal, you should always read the fine print, it is same applicable while signing a private hard money loan. Nobody wants to make any mistake, also you will not like to pay any fees, costs, or penalties which you don’t even aware of.
What’s the loan-to-value ratio?
Do they charge a prepayment penalty?
Do they require a bi-weekly payment?
Not Knowing Exactly How Much You Need to Borrow
In the term of monthly payment private hard money, loans are different from bank loans. In bank loans, the monthly payment will be the way to pay back the loan. But in private hard money loans, the monthly payments which you will pay interest only and the loan amount will be still due for the end of the loan term. The more you borrow, the higher your monthly payments will be according to the interest rate. Just be careful about the amount which you are borrowing. You will struggle with the monthly payments if you will borrow more than you need. And if you can’t able to pay it in the future, your home can be foreclosed by the lender because the entire property was used as collateral. It is also important that you will not borrow less than you need.
Trusted officers like ARC Capital can help to better to calculate the correct amount you need to borrow. They will help you in every situation, whether you are interested in the fix and flip project or you want to renovate your house. There are some unexpected costs which may arise during the renovation. These expenses can exceed the loan amount, leaving you too cash-strapped to make the payments. And just because of this your project can go a longer than you expected. Before signing any contract, you should always consider the estimated cost which your contractor has given to you.
Final Thoughts
Ask about these things first before you proceed with a lender. This will help you avoid heartache down the line. There are many differences between a bank loan and a private hard money loan. When it comes to qualifying for financing, Hard money lenders are more flexible than bank lenders. While working with hard money lenders, they could net you the “cash in hand” you need to make a cash offer. But, you will still have to pay off the loan with interest when you will sell the home. When you are interested in buying a house and flipping it, getting a private hard money loan for investment property is a good option. We know that sometimes people have a harder time getting a loan like we have discussed above. That’s why we offer multiple different alternative financing options. You have to be careful and avoid making any costly mistakes.
Our competitive rates, efficient services, and talented team can help ease the process of the home loan. We help our customers every step of the way. We prioritize informing and educating our clients about the home buying process. Our client’s happiness and confidence upon closing a deal reflect our excellent quality services. 3CALoan local mortgage broker provides no tax return home loan which is also called no tax return, without tax return, without tax return, private hard money home loan, private hard money loan, bank statement home loan, bank statement loan, equity loan and many more. If you still have any doubt, you can contact us at (818) 322-5626 or (818) 3CA-Loan today and our specialists will be in touch promptly to answer your questions. We will run you through the details of home loans and hold your hand throughout the process.
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