What Are Hard Money Lenders In Illinois?
The term ‘hard money’ sounds quite frightening, but all it refers to is an asset-based loan. The loans that are available from hard money lenders in Illinois are generally obtained at a higher interest rate and the terms are generally less favorable than those from traditional lenders. However, you would generally not have the time to wait for the lengthy process of obtaining a loan from a traditional institution. This is when hard money loans are the most suitable option.
Hard Money Loans Details
Hard money lenders make decisions extremely quickly and the criterion that the loan is based on is the value of the property. It is normal for the loan to be around 65% of the property’s value. Your credit rating is irrelevant in this instance as the loan is based on the value of the asset. There is a higher risk involved for the lender in this case and they often require that you have a business plan in place as well as a budget for the renovations or repairs required.
You may require some cash of your own as you will not be able to obtain a loan for the full amount of the purchase price and renovation costs. Hard money lenders in Illinois will normally offer you a loan that should cover 80% of the repair or renovation costs.