We’ve previously mentioned some common myths associated with hard money lending, but there are more to discuss that first-time borrowers may believe. Keep reading to learn more about some of these hard money myths.
Do borrowers have less control in regards to their property when they go with a hard money lender? No. If a developer is unable to raise sufficient equity, a partner may be brought in when taking out a traditional loan. The partner would contribute to the project equity financing, and the lender would invest in the LLC ownership versus the piece of property. However, this has potential consequences. Borrowers that choose an external partner may relinquish partial ownership of the property or may forgo ownership entirely. Hard money loans, on the other hand, use property as collateral, allowing borrowers to retain full ownership over a given property.
With a standardized approach to providing loans, it’s mistakenly believed that dealing with banks is simpler than with a hard money lender. Hard money lenders offer a significant advantage when it comes to flexibility. When it comes to new construction and development, hard money loans can be particularly effective as there are federal regulations that banks must abide by. Furthermore, hard money lenders provide greater adaptability with timelines, able to modify the loan should it be necessary due to circumstances such as changes in construction design
This update is by 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 loans Miami, please call 954-816-0388 or fill out our Florida hard money lending application.