Hard Money Loans Chicago Lending Guidelines For Investors
This Article Is About Hard Money Loans Chicago Lending Guidelines For Investors
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. 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. This is 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 a 25% to 50% down payment on hard money real estate purchase transactions. In this article, we will discuss and cover Hard Money Loans Chicago Lending Guidelines For Investors.
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 who are self-employed with perfect credit and who are bankable also turn to hard money loans due to less paperwork and fast closings.
Benefits Of Hard Money Loans Chicago Versus Traditional Commercial 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 a massive amount of paperwork like banks and traditional commercial lenders.
Time is money for many real estate investors:
- If there is 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 from 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 an existing one may benefit from 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 us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Investors can also email us at gcho@gustancho.com.
