Bloomfield, New Jersey is a town in Essex County, New Jersey. It has a population just over 50,000 people and is located in the northeastern part of the state. It has the eighth-highest per capita personal income in New Jersey, and is considered one of the best places to live in New Jersey. Bloomfield has an urban-suburban mix feel, and most residents in Bloomfield own their homes.
There are many restaurants and coffee shops in Bloomfield, as the city has a thriving night life. It is home to many young professionals. Bloomfield is very close to Newark as a suburb of the city. It has a rich history during the American Revolution and the Civil War, and Bloomfield is known for Bloomfield College, and in the town, it’s split down the middle between renters and buyers. Bloomfield is also very close to New York City and is very affordable — it is a short commute away and a quiet place to live and raise a family.
Right now, Bloomfield has a median home value of $329,900 and a median rent of $1379. Bloomfield is a seller’s market. It is a place where demand is rapidly outpacing supply. In Bloomfield, real estate investors are getting into bidding wars over prime real estate in the town. It’s a housing bubble much like the rest of the country after the pandemic.
Investors in Bloomfield should look into hard money loans. Hard money loans are otherwise known as last-resort loans, but they can greatly assist real estate investors in really competitive markets like Bloomfield — they have a speed of approval of a couple of days, whereas traditional mortgage loans can take a month or more to be approved.
Hard money loans are different from mortgages because they use the property as the asset and collateral. Hard money loans don’t rely on financial standing like mortgages do. It’s not like attributes like credit score don’t matter, since hard money loans require a minimum credit score of 600 to 620. However, most hard money lenders look at other factors, especially the property. They also look for how reliable you are as an investor and if you have experience.
If a borrower defaults on a mortgage, the bank forecloses on the property in a very lengthy process. However, if a borrower defaults on a hard money loan, the lender takes on the property in a very expeditious and fast process.
Hard money loans have plenty of cons as a result. They are known for their unforgiving terms and rates, especially when you compare them to traditional financing. Hard money loans have higher interest rates. They have 8–15% interest rates, which is significantly higher than the interest rates of mortgages.
Hard money loans also have lower LTV ratios, which means borrowers have to put down a higher down payment than they would with a mortgage. Hard money loans usually have LTV ratios between 65–75%, while mortgages typically have LTV ratios of 80%. Lastly, hard money loans typically have shorter repayment periods than traditional mortgage loans — they have to be repair within a year on average, while most mortgages need to be repaid in 30 years.
For all these reasons, and because hard money lending is an alternative and unregulated form of financing, it’s essential to only trust the best hard money lenders. We have you covered at Hard Money Lenders IO — here are the best financers for your real estate transaction in Bloomfield.