It can be quite challenging to get approval for an investment property mortgage nowadays. If you are a real estate investor it’s a roll of the dice to try and qualify for a traditional loan. The same applies if you are looking to purchase a property that you will not occupy personally. With the current economic state, banks have had no option but to tighten their standards. This has left many potential buyers or borrowers out in the cold.
Hard money lenders Miami have become a very popular option, particularly for real estate investors. The reason for their popularity is simply because they are willing to underwrite loans that the traditional institutions are hesitant to take. They focus on the equity in a property rather than on the borrower’s history or credit rating. Hard money loans will definitely cost more than loans from traditional institutions, but for investors who are looking to use the money for an investment opportunity, the added cost may well be worth it.
Traditional vs. Hard Money Lenders Miami
Although hard money loans are easier to obtain, investors should not ignore traditional loans. Rates are low on these types of loans which mean you already have an advantage. The main reason for an investor to choose a hard money loan compared to a traditional loan would normally be timing. Traditional money lenders have a definitive process that you have to go through to obtain a loan. Trying to change this method is futile and it generally takes about one month to get a loan approved. It is normally the case with investors that they require a loan within a short period of time, hence hard money lenders Miami will be their first option as it can take up to five days for a loan approval.