Purchasing a Property Quickly Using A Hard Money Loan
If you are ready to buy a home, but don’t want to wait the extended time it usually takes to get a traditional home loan, or if you are having difficulty securing a mortgage with a regular lender, a hard money loan can be a great option in certain situations. Hard money loans offer a fast pathway to getting a mortgage by using the property itself as collateral. If you are interested in your financing options in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, Foundation Mortgage can help. This blog will discuss how to purchase a home quickly using a hard money loan.
Essential Information: Hard Money Loans
Hard money loans allow a homebuyer to borrow money for a home without having to deal with the traditional lending process and they are secured by real property instead. Applying for a conventional loan can be a lengthy process since lenders require a borrower to prove that they have the ability to pay back a loan by verifying stable income, a low debt-to-income ratio, and good credit history. Due to the fact that a hard money loan is backed by an actual asset, a lender is not as concerned with traditional documentation proving a borrower can pay back the loan since they are able to use the property itself as collateral to get their money back in the event that the borrower is unable to pay back the loan. A hard money loan has a shorter term than most traditional loans, and is based on the value of the property. They also tend to have higher interest rates than other loans since they are considered as a riskier type of loan for lenders.
The Benefits of Obtaining A Hard Money Loan
Using a hard money loan to buy a home can offer many advantages for a potential homeowner. One major benefit is that the loan approval process takes less time than a conventional loan because a lender doesn’t need to review your credit, tax information, etc. They are primarily concerned with the value of the property since it is being used as collateral. Additionally, since hard money loans have a lower loan-to-value ratio, a large down payment is not required, unlike a traditional loan. Lastly, since lenders evaluate each loan transaction on an individual basis and can make modifications to the terms to meet a buyer’s needs, hard money loans offer a great deal of flexibility.
Getting Help With A Hard Money Loan
Fortunately, there are many other loan options available in addition to traditional mortgage financing to help someone become a homeowner. If you are interested in buying a home with a hard money loan in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, contact Foundation Mortgage today for a consultation.