When it comes to residential real estate sector, there are certain opportunities, which ought not to be missed. At such times, getting a private loan, which is also known as hard money bridge loan, can render valuable advantages over the bank loans or other financial arrangements. One can get more flexible and quick funding from private lenders. Apart from this, there are no prepayment penalties, which may cause an indirect hindrance to your business. Read on further to know some of the benefits you can get on seeking loans from private lenders for residential real estate.
These are times when the financial sector has been smitten by several setbacks due to economic downturns and mega fraudulent matters like Enron. Once bitten is twice shy holds true for the banking sectors. Now banks want lenders to fill an endless number of forms and provide statements as well as various other documents. It means a business must have testing levels of patience. However, the real estate opportunities are fast to fly away and these would be caught by another person if not you. Therefore, quick funding is highly necessary.
The private lenders would be proceeding swiftly as they base their decisions on the liquidation value of the collateral offered. Ultimately, this would let you move fast forward in your business instead of getting stuck in financing oblivion.
The traditional financing institutions are not flexible and generally they use a one-size-fits-all approach. However, the market is evolving constantly and so is your business. When you approach the private lenders, they would be able to structure a collateral release scheme and repayment model which would prove beneficial to both the parties involved. Thus, you can expect better outcomes.
Do away with prepayment penalties
There are some best-paid plans which can change for the better. You do not want to get penalized for achieving some amount of success during the days when business is moving well.
Disregarding this, the traditional institutions are going to charge huge prepayment penalties in case you are able to pay the loan before the due date. On the other hand, private lenders would rather prefer to invest in the success of their client. Therefore, they structure loans where there are no added fees or prepayment penalties. Thus, private lenders for residential real estate are more committed to your success and well-being.
The bridge loan is going to hold until your property is sold. In case you have decided to sell the property now, but it would take some time for the same to materialize, the bridge loan is helpful.
Thus, hard money bridge loans are a smart alternative for borrowers as you get professional service with convenient short-term financing. It is useful to keep in mind that bridge loans may not always be hard money. While the bridge loan can be used for various other purposes, the hard money bridge loan is used just for buying property.