Derry is a town in Rockingham County, New Hampshire with a population of just over 34,000 people. Derry is known as “Spacetown” due to it being home to Alan Shepard, who was famous for landing on the moon. It was also once home to Robert Frost and his family. Derry has a long history of being a suburb of both Boston and Manchester. Besides its status as home to Alan Shepard and its name as Spacetown, Derry is also known for its easy access to route 93.
According to Niche, Derry is a Boston suburb that has a very dense suburban feel. Most people own their homes in Derry, and it’s home to many coffee shops, parks, and green space. The town is home to a variety of young professionals, and currently, it has a median home value of $264,700 and a median rent of $1,199.
Right now, Derry is a buyer’s market. It’s a place where supply is greater than demand in terms of housing, and where homes are selling slow and for lower than listing price.
Investors in Derry would benefit from looking into hard money loans. Hard money loans are loans that are an alternative to traditional financing — they’re used for real estate transactions like fix and flips, long-term rentals, and construction projects. Hard money loans usually have an advantage in seller’s markets of having very fast speeds of approval. But in buyer’s markets, hard money loans have very different advantages.
In Derry, hard money loans can qualify a real estate investor for cash only properties. In real estate, cash only means the buyer has to pay for the home in cash and all up front, but it also means the home is in such terrible condition the home did not qualify for traditional financing. Most often, cash only means the home needs quite significant repairs before the bank will touch it again.
Hard money loans can qualify as cash not only because they’re a different form of financing to traditional mortgage loans, but because they are designed for the purpose of repairing homes in disrepair. A real estate investor can make a significant profit repairing cash-only properties in poor condition.
Hard money loans are different from traditional mortgage loans in that they use the property as the asset. They don’t depend on the credit score of the borrower as much on the financial standing of the applicant as traditional mortgage loans. That’s not to say credit score doesn’t matter, as most hard money lenders require minimum credit scores of 600 to 620, and a good credit score can help an investor get a better interest rate. Hard money loans use the property as collateral, which means if a borrower defaults on a hard money loan, the lender becomes the homeowner and tries to flip the property themselves for a profit.
This means hard money loans have lots of disadvantages — they have higher interest rates than traditional financing, need to be paid off sooner, and require higher down payments. Despite surging interest rates in a crazy housing market, hard money loans still have higher interest rates than traditional mortgage loans. Right now, the average interest rate is 5.57%, which is significantly lower than the interest rates of your average hard money loan, which is 8–15%. If an investment does not pan out, it can be very hard to pay off a hard money loan.
That’s why it’s so important to only choose the best hard money lenders. We at Hard Money Lenders IO have chosen the best hard money lenders in Derry for your real estate investment.
