Looking to buy a home? Sometimes it can be extremely difficult and stressful, not only mentally, but also financially. Sometimes your best bet when it comes to meeting your financial goals for buying a house is getting a private mortgage loan. Private money funds, also known as “hard money,” usually come from private investors or private lending companies who are willing to loan homebuyers money to purchase a specific property. There are many benefits to consider about private mortgage loans before deciding what to do when collecting money to buy our home.
- Easy to Qualify
Private loans could be a great option for homebuyers who are not able to qualify for a traditional mortgage because of less-than-perfect credit, debt or for self-employed individuals who can’t always provide proof of a steady income.
- Great for House Flipping
A private loan is great for homebuyers that plan on flipping, or renovate the home and resell. However, you might consider such a short repayment period if you plan to sell or “flip” the house within that time frame, or expect to be able to qualify for a conventional refinance within a few months after getting the property.If you plan to make extensive renovations in a short time period that will boost the value of the home, it is possible that you could sell or refinance the property fairly quickly.
- Short approval process
If you have a house that you believe is eligible for a private loan, the approval process often takes just a couple of weeks, as opposed to 30 to 45 days for a conventional loan.For many borrowers, getting a loan that quick is a good exchange for higher interest rates. If you have a house you want to flip, and you feel that you could improve it enough to increase its worth in a short period of time that would allow you to pay off a private loan and replace it with a sale, then getting a private loan is a practical option.