---------------------------------------------------------------------------------------
Private
money loans are also known as hard money and it comes from private
lending companies who offer loans to home buyers to buy a specific
asset. Generally, home buyers often find these lenders by engaging a
real estate investment club in their area. These loans are often secured
by home investors. But unfortunately not every home-owner will be
successful getting fund from a private lender. Here are the major pros
and cons of private mortgage loans.
This
loan could be a great option for home buyers who are not able to
qualify for a traditional mortgage because of less than exact credit,
debt or for self-employed people who can't always offer proof of a
stable income. A debtor should remember that a person with a poor credit
record can get a hard money loan if the project shows the profit.
Personal
loans are not paid back over 30 years like a traditional loan. A huge
big number of private lenders expect the loan to be repaid within a very
short time like as six to twelve months. Lenders are often looking for a
very quick return for their money, and they generally are not set up to
offer a loan for several years the way a typical mortgage company is.
Homes that need extra renovations generally can't get qualifies for
conventional mortgages, no matter how better a borrower's credit score
is. In those cases, private money can play a very important role. A
non-traditional lender can step in and offer to finance to get the house
in sell-able condition, then flip the house.
One
major drawback of personal mortgage loans is interest rates. The rates
of interest are much higher with a private money lending than with a
conventional loan. Even, sometimes mortgage rates are more than double,
often 12 to 20 percent per year. Basically, mortgage rates are very high
because private lenders don't need exact credit. Fund from private
lenders are generally secured by the property in question, so it is
usually not very important to the lender if the debtor has good credit
or not.
If
you own a house that you believe is a candidate for a personal loan,
the approval procedure often takes just a couple of weeks, as opposed,
it takes 30 to 45 days for a conventional loan. For many borrowers,
qualifying a loan than fast is a very good trade-off for higher interest
rates. Generally, private money lenders don't need a long drawn-out
loan process like a conventional mortgage does.
If
you have a house and you want to rehab it, as well as you feel that you
could make it better enough to boost its worth in a short time that
would allow you to pay off a personal loan and replace it with a
conventional sale, then applying for a private loan is a viable option.
As long as you understand the caveats and complete your research, there
has a possibility to successfully secure a property without a
conventional loan.
As
a private lender, Miner Capital Funding is a well-known and reliable
company in the USA. It offers the best and flexible loan option for
every debtor. Enjoy the wide range of services such as SBA loan
programs, hard money loan programs as well as conventional financing. Grab the opportunity and fulfil your all requirement with the Miner Capital Funding.
Article Source: http://EzineArticles.com/expert/Carlton_Mansour/2140327
Article Source: http://EzineArticles.com/9389381
EmoticonEmoticon