Top 6 Advantages Of Using Hard Money Loans To Fund Real Estate Deals

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Top 6 Advantages Of Using Hard Money Loans To Fund Real Estate Deals

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Category : Hard Money Loans , private money lenders , Real Estate Loans

A hard money loan is a short-term financing option used to fund the purchase of an investment property. This type of loan is often a financial tool for house flippers or real estate investors whose goal is to renovate or develop a property, then sell it for a profit. Hard money loans offer huge benefits that are not typically available through traditional lenders such as banks and other financial institutions.

Here are top 6 advantages of using hard money loans to fund your real estate deals:

1. Simple, Easy And Quick Loan Process:
The application process for a hard money loan generally takes less time for you to be approved for the loan, which allows you to use your loan money quicker. This time-saving process can allow you to act on more opportunities and even gain an edge on the competition through speed and execution. The simplicity and straightforwardness of a hard money loan has made it a popular choice for all kinds of real estate investors.

2. Minimum Loan Conditions:
In order to obtain hard money loans, a borrower needs to satisfy a short list of criteria whereas a bank has many hard-set requirements, like income history, experience, etc. that need to be met. The entire process of bank loans can become drawn out and the borrower, ultimately, may not even be approved in the end. On the other hand, hard money loans are fairly simple and straightforward. If the hard money lender assesses that a borrower’s target real estate investment is an excellent value and the borrower has at least 20% equity to put into the deal, it is likely that the investor will qualify.

3. Quick Approvals And Rapid Funding of Loans:
Loan approval for hard money loans is far quicker than traditional banks or financial institutions. Traditional loans are based somewhat on your credit, it could take 1 to 3 months to secure a traditional mortgage whereas hard money loans are typically based on the value of your investment property. Since the property is the asset that is backing the loan, hard money lenders are only interested in how much value they see in the property. Depending on your lender, you could obtain hard money loans in a few days or a few weeks.

4. Flexible Term Structure:
Banks are not flexible and typically take a one-size-fits-all approach to all loan requests whereas private hard money lenders can structure repayment and collateral release terms in ways that are mutually beneficial to both borrower and lender. Greater flexibility often results in better outcomes.

5. Works With Bad Credit History:
In order to obtain traditional loans, you should have a decent credit history to meet the bank’s criterion. If you have negative items in your credit reports, the process takes even longer and you might not ever get approved for traditional loans. In the case of hard money lenders, credit history does not matter. They lend based on collateral securing the loan, and they are less concerned about your ability to repay. For hard money lenders, the value of the collateral is more important than your financial position.

6. Zero Prepayment Penalties:
It’s another significant advantage of hard money loans is the absence of prepayment penalties. Traditional financial institutions often charge hefty prepayment penalties if circumstances change and a loan is fully or partially repaid before the due date. You can avoid these fees by opting for hard money loans. Private hard money lenders are fully invested in your success and typically structure loans without prepayment penalties or added fees.

The Bottom Line:
Hard money loans are very beneficial for those who need quick financial solutions and either cannot wait for or do not qualify for conventional banking approvals. You can utilize hard money loans in order to grow your financial portfolio in short-time. Hard Money lenders can fund quickly, within a flexible structure and without prepayment penalties that can unintentionally hinder the success of your business.

If you are trying to get a hard money loan to grow your real estate business, contact one of the most trusted hard money lenders today called Magna Capital Group, Inc. We provide residential and commercial real estate hard money loans at competitive rates. We have helped hundreds of California investors get the real estate capital they need. We are a quick, simple bank financing alternative. For information about our hard money loan programs, Call us today at (310) 734 4044 or email at info@magnaloans.com.

Six Easy Steps to Get Funded With Hard Money Loans Quickly!

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Category : Hard Money Loans

If you are close to foreclosure or cannot find a traditional lender who will meet your odd financing requirements, you can consider getting a hard money loan. A hard money loan is simply a short-term loan secured by real estate property. Hard money lenders offer loans that traditional financial institutions can’t: they move quickly and lend based on collateral instead of credit scores. The loan terms are usually around 6 to 12 months and can be borrowed on almost any type of property including single-family residential, multi-family residential, commercial, land, and industrial.

If you have sufficient equity in your property and need fund quickly, follow these 6 easy steps to get a hard money loan easily and quickly:

1. Find A Local Hard Money Lender:
Find trusted hard money lenders like Magna Capital Group, Inc. who lend money in your locality. You can Google it or visit a local real estate network and get referrals from real estate professionals about a local money lender. Magna Capital Group, Inc. is a leading hard money lender in California, provides hassle-free equity-based private and hard money loans for residential and commercial properties. For more information, you can call at (310) 734 4044 or email at info@magnaloans.com.

2. Interview Selected Hard Money Lenders:
This is the second important step after getting some hard money lenders in your locality. You can call each hard money lender to begin the interview. Go through a brief conversation with them to understand each strategy properly. Here are some important questions that you can ask hard money lenders in order to choose the best one:
a) how much experience do you have?
b) are you a licensed lender?
c) can you show me your references?
d) how do you fix your interest rate?
e) how fast you can approve my loan application?
f) how much LTV can you offer?
g) what types of loans do you offer?
By asking these questions, you can get a good sense of the lender’s services and criteria, helping you to find just the right one for your investment property.

3. Select A Lender And Apply For The Loan:
On the basis of your interview, you can select one of the best hard money lenders from your list and submit your loan application. The process of a hard money loan is very quick and easy. You have to fill a short personal financial statement about yourself, liabilities, expenses, income, assets, subject property and employment. It will take few minutes to apply for a hard money loan.

4. Sign Disclosures:
After submitting your loan application you need to sign disclosures. E-sign consent is the primary disclosure. Permission is given to the money lender so they can send documents to you through the mail. You have to follow the privacy policy, fair lending notice, hazard insurance disclosure and mortgage disclosure statement to apply for the loan.

5. Sign Loans Documents:
The loan documents will only be ready when you will sign the disclosures. There are certain things that make up the loan documents –
• Payment Guarantee
• Note
• Escrow Instructions
• Deed of Trust
• Arbitration Agreement

6. Wire Down Payment:
After signing all the documents, you will be asked to pay down payment. Once it is confirmed by the escrow that your hard money lender has received all the documents then the loan will be funded to you.

The Bottle Line:
If you are a real estate investor with great buying opportunity but cannot get fund from anywhere, you can apply for hard money loans to secure the financing you need. These six simple steps can help you to get your hard money loan approved quickly and smoothly.

A private hard money lender like Magna Capital Group, Inc. can fund quickly within a flexible structure and without prepayment penalties that can unintentionally hinder the success of your business. For more information about hard money loan or our loan programs, please feel free to us at (310) 734 4044 or Email at info@magnaloans.com.

4 Best Financing Options For Fix and Flip Business!

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Category : Fix & Flip Loans , Hard Money Loans

House flipping is a type of real estate investment strategy in which an investor purchases properties with the goal of reselling them for a profit. A fix and flip is an excellent way to quickly make money from real estate, and with wise decisions, can be a long-term investment or retirement strategy. A lot of people dream of getting into the business of fixing and flipping houses, but funding is the number one obstacle. You need capital to purchase homes and cover the cost of renovations before you can flip them for a profit.

House Flipping is not just a matter of buying a house and selling it for a profit, but also there are so many costs involved. For examples:

  • The purchase price of the house.
  • Rehab costs.
  • Appraisals and inspections carried out on the property (for example for beetles, pests or foundation inspections).
  • Holding costs, realtor fees, and closing costs.
  • Loan interest and fees.
  • Down payments on loans.

If you’re thinking about flipping, you’re probably looking to acquire an investment property and then fix it up to sell at a higher price. If so, here are four top financing options to help you get started:

1. Get A Hard Money Loan: Hard money loans are the best financing option for novices or borrowers with a bad credit score. Hard money lenders can get you funds quickly to buy the house that you will flip as well as pay for any of the costs. Loan approval of a hard money loan is far easier than obtaining a more traditional loan. Hard money loans usually have terms of less than one year and interest rates of 12% to 18%, plus two to five points. Hard money lenders can finance up to 65% of the home’s ARV or after-repair value, which is what you think the house will be worth once the renovations are done.

2. Cash Out Refinance: Its best for the fix and flip investors who have significant equity in an existing investment property or primary residence, but not for those who are just getting started, or for those who still need a bit of extra funding on top of what comes from the cash out refinance.

3. Home Equity Line of Credit: A home equity line of credit is basically taking out a second mortgage as you will also be repaying it over a fixed term, often with a fixed rate of interest. It’s one the best financing option for those flippers who already own a home. Keep in mind, if you do choose this financing option, your home will act as collateral. You risk foreclosure and the loss of your house if you do fall behind in payment. However, if you are confident in your ability to flip a house, it could give you the capital you need to jump-start a new stream of revenue.

4. Conventional Bank Loan: Conventional bank loan is an another financing option that you may opt. Bank pays for the property and you pay the mortgage payments until the house is rehabbed and sold. Its best for experienced flippers who have a great credit score, capital on hand, and significant collateral. For a conventional bank loan, you will have to provide around a 20 to 30 percent down payment of the purchase price on the house you intend to flip. They will also need to know what you intend to use the money for. A traditional money lender may outright refuse to fund it if there are health and safety issues at play. While you intend to fix these issues to flip the home, a traditional money lender generally prefers to fund homes that are already fixed up and livable.

Find the Right Financing Option For You:
If you need capital to flip houses, these are 4 top financing options for flipping houses that you can use to acquire as many properties as you want. Out of these 4 fix and flip funding options, the best one for you depends on the type and condition of the property, your experience with real estate investment, and your personal financial situation. If you are beginner or borrower with bad credit score then hard money loans would be the easiest and fastest financing option you.

To get started on your fix and flip quickly, with most of the funding you need, contact Magna Capital Group, Inc. today to discuss your options. We provide hard money loans at very competitive rates with fast approval and funding. We have proven to be reliable fix and flip lenders and earned many satisfied repeat customers. For more information about loan programs, call us now at (310) 734 4044 or email at info@magnaloans.com.

10 Important Things You Should Know About Hard Money Loans!

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Category : Hard Money Loans

A hard money loan is a type of quick financing secured by a property. Real estate investors have long used hard money loans to finance their real estate investments for reasons of speed and flexibility. But for those who have never taken out a non-traditional loan before, here are 10 important things they should know about hard money loans:

1. Process for Hard Money Loans:
Hard Money Loans provide Investors access to capital to purchase investment properties. The application for a hard money loan is very simple. Hard money lenders typically take one to two days and may even be approved the same day. Hard Money is available for adequately collateralized loans on single-family residential houses and other Real Property including commercial projects. The simplicity and straightforwardness of a hard money loan has made it a popular choice for real estate investors and house flippers.

2. Interest Rate:
The interest rate for hard money loans varies from lender to lender. Usually interest rate ranges from 10% to 18% interest only annual interest rate payable monthly in most cases. Some Lenders will defer interest payments to payoff, benefiting investors that do not want payments during rehab.

3. Loan-to-Value (LTV):
Hard money loans are backed by the value of the property, not by the credit worthiness of the borrower. With a hard money loan, a borrower can borrow 65-75% of the property value. With most hard money lenders, the loan to value is determined through either an appraisal or a broker opinion of value.

4. Loan Terms:
A hard money loan is simply a short-term loan secured by real estate. The loan terms are usually around 12 months depending on the Lender and your needs, but the loan term can be extended to longer terms of 2-5 years. Longer the term can lead to increased costs or interest rate.

5. Loan Costs:
The costs will vary based on the loan amount. All loans will require title policy, insurance, and appraisal. These services come with fees that can range from a few hundred to a couple of thousand dollars. Most require origination points ranging from 2 to 10 points.

6. Credit Scores:
Credit Scores are considered but lenders set their own criteria for “acceptable credit” and will be more receptive to “common sense” credit review. Private Money Lenders look more at the situation and the cause of the credit flaws and rely on the collateral and higher points and rate to mitigate risk.

7. Hard Money Loans for Repairs:
Yes, hard money loans can opt for repairs also. Most hard money lenders require a draw request form to be filled out to identify the completed repairs to the property, copies of the invoices from the contractors or sub-contractors. After work is inspected, draws can be dispersed. Typically work is not paid in advanced.

8. Down Payments:
In most cases, you need to put money down. Lenders want to ensure that you have enough resources to finish the repairs and cover the costs of the loan plus any surprises. Therefore, most hard money lenders require that origination/discount points and other required items be paid at or before closing. They are confident that if you cannot afford to close you typically cannot afford to take out this type of loan.

9. Prepayment Penalties:
Traditional financial institutions often charge hefty prepayment penalties if circumstances change and a loan is fully or partially repaid before the due date, but private hard money lenders are fully invested in your success and typically structure loans without prepayment penalties or added fees.

10. Loan Flexibility:
Hard money lenders are flexible can structure repayment and collateral release terms in ways that are mutually beneficial to both borrower and lender. They always believe greater flexibility often results in better outcomes.

The Bottom Line:
If you need fast access to capital for real estate investments then hard money loans are great option for you. Hard money loans can be obtained faster and easier than a conventional loan and while in almost all cases the amount you can borrow from a private lender exceeds the amount you can qualify for from a convention lender the cost difference is minimal.

Magna Capital Group, Inc. is one of the leading hard money lenders in California. Through our global network of relationships, we identify and implement a wide range of real estate and financial transactions. We have extensive experience in placing conventional & private money financing on residential and commercial properties of all types. If you are considering for a hard money loan, please feel free to contact us today at (310) 734 4044 or Email at info@magnaloans.com.

The Most Efficient Ways To Get Financing With Bad Credit!

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Category : Bad credit home loans , Hard Money Loans

Do you have bad credit but are in need of a loan right now? If so, you need to find out about loans for people with extremely bad credit and you will be surprised that you do have options. Having a bad credit could make your life difficult in the past. But these days, things have changed. Here are a few ways to try getting a loan with bad credit:

Visit Credit Unions:
You can visit credit unions near you. A credit union is a member-owned financial co-operative. These institutions are created and operated by members and profits are shared between the owners. Credit unions may be more willing to work with you, even if you’ve got bad credit. Because they tend to be smaller than large banks, there’s a better chance that they’ll look at you personally – as opposed to just looking at a credit score and other numbers on the loan application.

Try P2P Lenders:
Peer to peer lending services is another option for getting a loan with bad credit. Instead of borrowing from banks (with rigid rules and higher overhead costs), you can borrow from individuals. They may be more sympathetic, but they’re not looking to lose their money.

Tap Friends & Family:
If your credit is really bad, your friends and family may be your only option. They know you, and they may be willing to take a chance. If you borrow from friends and family, do it properly so everybody’s protected: document the loan terms on paper, and consider using a third party to process payments. If friends and family won’t hand over their own money, they might still be able to help. If they have good credit, they can help you qualify for a loan as co-signers.

Get Bad Credit Loans:
A bad credit loan is the last resort of getting finance with bad credit. It’s most efficient and easy way to fund quickly. There are both secured and unsecured options are available for bad credit loans. Unsecured bad credit loans will require no collateral and will suit if you want to borrow smaller amounts. For larger amounts secured bad credit loans are appropriate and would require collateral like home or real estate property. Bankruptcy, arrears, late payments, CCJs, defaults, foreclosure and any court case are seen as bad credit cases. None of these things on your credit report can prevent you from having bad credit loans unless you have pretty bad credit condition like multiple bankruptcies. In worst case scenario there will fewer lender ready to take this sort of risk.

Loans for bad credit offer respite to people whose loan applications have been rejected by all other lenders, citing their poor credit history. The biggest advantage of such loans is that you can obtain the much-needed money that was otherwise not available to you. Bad credit loans can help get you back on your feet financially and have the added benefit of improving your credit score. Being regular on bad credit loans have positive effects on the borrower’s credit history.

The Bottom Line:
Bad credit loans are helpful in gaining and improving financial status and the credit score of the person. If you need cash but don’t have the funds, then consider applying for bad credit loans. These loans do not require any credit checks. The person having bad credit history like arrears, default payments, late payments etc can avail this loan facility as this facility is specially designed for these types of people.

For more information about bad credit loans, contact Magna Capital Group, Inc. today at (310) 734 4044 or email at info@magnaloans.com. We will find the right loan program with comfortable monthly payments for you.

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