Differences between Conventional Lenders and Hard Money Lenders Massachusetts

Aug 29, 2014 | Hard Money Blog, Hard Money Lenders Archives, HardMoneyMan.com News Archives

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 Conventional vs Hard Money Lenders in Massachusetts – What You Need to Know

 If you’re a real estate investor or house flipper in Massachusetts, chances are you’re familiar with the mortgage lending process. But did you know there are two different types of lenders? Conventional and hard money lenders each have their own set of rules and regulations, so it’s important to have an understanding of the differences between them before choosing one. In this article, we’ll explore the pros and cons of both conventional and hard money lenders in MA.

 

What do Conventional Lenders offer? 

Conventional lenders are banks or credit unions that offer traditional mortgages for buying a home or refinancing a loan. These loans are typically secured by the borrower’s property and require collateral such as the borrower’s home or other assets. A conventional lender will usually require good credit history, employment verification, and proof of income before they will approve a loan.  Pros: Low interest rates, flexible terms and conditions, less paperwork Cons: Strict eligibility requirements, long processing time

What do Hard Money Lenders offer? 

Hard money lenders provide loans secured by real property but without the same stringent requirements as conventional lenders. These loans can be used to purchase investment properties or refinance existing loans. Hard money loans often come with higher interest rates than conventional loans because they are riskier investments for the lender. Pros: Quick approval process (often 24 hours), more flexible terms than conventional lenders Cons: Higher interest rates, shorter repayment period

Conclusion:  As an investor or house flipper in Massachusetts, understanding your options when it comes to borrowing from either a conventional lender or hard money lender is paramount to success. Conventional lenders offer lower rates but have strict eligibility requirements while hard money lenders provide quick approval but come with higher interest rates and shorter repayment periods. It is important to weigh all your options carefully before making a decision – if done correctly this can be the difference between success and failure when investing in real estate!