Are you interested in purchasing a home, but don’t want to wait for the amount of time it takes to obtain a traditional home loan, or are you experiencing difficulty securing a loan with a traditional lender? In certain cases, hard money loans are a more viable option because they offer borrowers a pathway to getting a loan from lenders who will lend you money by using the property as collateral. If you are located in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and want to know more about obtaining a hard money loan, the loan specialists at Foundation Mortgage can help.
Essential Information: Hard Money Loans
A hard money loan is one way to borrow money without going through a traditional lender, and the loan is secured by real property. Typically, when obtaining a traditional loan, lenders require evidence that you are able to repay the loan, so borrowers must demonstrate their ability to repay by providing proof of a low debt-to-income ratio, a consistent income, and acceptable credit history. The process of obtaining a traditional loan can often be very lengthy and time-consuming. Since a hard money loan is backed by a tangible asset, lenders are not as concerned with the borrower’s ability to repay the loan because they can use the property as collateral to get their money back if the borrower is unable to pay off the loan. The terms on these types of loans are usually shorter than traditional loans, and are based on the property value. Hard money loans do pose a higher risk to lenders, so they generally have higher rates than when you finance with a traditional loan.
Benefits of a Hard Money Loan
Hard money loans offer the borrower a great deal of flexibility because lenders examine each transaction on an individual basis and can modify specific terms in order to meet a borrower’s unique needs. Another advantage of a hard money loan is that the approval process is typically faster than obtaining a traditional loan because the lenders do not need to take time to evaluate the borrower’s credit history and other factors. They are more concerned about the value of the property since it is being used as collateral. Additionally, since hard money loans have a lower loan-to-value ratio, it is not as imperative to make a large down payment, which is normally required for a traditional loan.
Get Help Today with a Hard Money Loan
There are several different ways to obtain a home loan, in addition to traditional financing. If you are interested in learning more about hard money loans in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, contact Foundation Mortgage today. We can work closely with you to determine the financing option that best suits your needs.