Before you rush into calling any hard money lenders NY is home to, it is important to understand on what grounds they operate. Unlike banks or other public institutions, they will not lend you money based on your credit worthiness or your income.
What Will They Lend You Money On?
Hard money lenders always secure the loans they provide against a real estate property, be it an investment or a commercial property. The important aspect to keep in mind is that these lenders only deal with real estate investors.
This means they will finance your project, no matter if it involves building, buying or rehabbing a home, only if your final goal is to increase that property’s value before putting it out for sale or rent, and, thus, ensure higher profits. They will never allow you to use as collateral the house you live in and use a hard money loan the way you would use a typical mortgage loan.
Why Won’t Hard Money Lenders NY Accept Your Residence As Collateral Or Finance Personal Projects?
Hard money loans can be pretty expensive. Their interest rate is higher than that of mortgage loans and they are only granted for short time periods, never for longer than a year. In a desperate situation, you may be willing to borrow money under any terms and conditions, even if you risk losing your home.
However, they do not want your property. They just want you to repay the loan and the corresponding interest at the due date. This is easy for a real estate investor, who may buy a property at a bargain price, rehab it and sell it for twice as much. However, it in nearly impossible for a homeowner living from a salary and with a family to support.
To sum up, hard money lenders NY will finance real estate projects backed by thorough investment plans that have selling or renting as final goal and every chance to be successful.
In order to approve a loan application, they will have the property appraised, they will check its existing condition and they will want to know all the details of your investment: what it involves, how long it will take, how much it costs and how much money it will bring you.
If your property and your situation match the above, do your research and contact the best hard money lenders NY is home to.