With hard money loans, the interest rates are largely based on risk versus a borrower’s credit score. It’s important not to confuse them with equity loans, which are issued by banks after evaluating the value of a home and the borrower’s credit score.
A hard money loan is a viable solution if money is needed quickly for a timeframe much shorter than a typical loan. As we’ve discussed in the past, borrowers often choose a hard money loan when they wish to purchase a property for “fix and flip” purposes. Some of the factors that will affect the loan and the approval odds include the amount of collateral in the property and repayment plan are two things that can determine approval. The appraisal is another factor that is often taken into account.
If you’re unfamiliar with appraisal, it analyzes a property value while also comparing it to sales of neighboring properties. This analysis may also include a proposed broker price. To ensure the utmost accuracy, it’s worth seeking a broker with a solid reputation for providing impartial assessments. You can request that another appraiser examine the initial appraisal if you want to make sure it is accurate and fair.
Should an appraisal show that the property value will rise once the loan has received approval and the intended work is performed, a hard money lender is likelier to provide funding. Then again, if the appraisal shows that the property value won’t increase much, the approval odds may be reduced.
This update is by hard money lending Miami company Monroe Funding Corporation, a direct equity lender serving clients throughout Central and South Florida. We specialize in first mortgages on non-owner occupied residential and commercial property investments as well as real estate loan options. Our fast and flexible loan programs get you to the closing table quickly and professionally. For more information on hard money lending Florida or hard money lenders Florida, please call 954-816-0388 or fill out our application.