Ellicott City is widely known as one of the best places to buy rental property in Maryland. It is divided into two areas, Greater Ellicott City and Historic Ellicott City. It is a suburb that has a lot of homeowners, and is highly rated across areas like public schools, diversity, housing, and nightlife. It is the county seat of Howard County and the largest unincorporated county seat in Howard County.
Ellicott City has a median household income of $131,534, which makes it a wealthy area and a very desirable place to live. It is a place with terrific dining and many breweries, and its proximity to Baltimore and Washington D.C. also make it a very appealing place to live.
As of January 2022, Ellicott City is a seller’s market. It is widely considered a very competitive and desirable housing market because demand outpaces supply.
As such, hard money loans might be the best way to invest in real estate in Ellicott City. Otherwise known as bridge loans or last resort loans, hard money loans have the big advantage of being approved very quickly. Mortgages from banks might take a month or more to be approved, but hard money loans can be approved within a couple of days, and the expedient and convenient cash makes an investor instantly competitive in Ellicott City.
Hard money loans can be approved so quickly because they’re based on the property, not the credit of the borrower. The borrower’s credit does factor in a little — most hard money lenders require minimum credit scores of 600 to 620. However, hard money loans use the property as collateral and the basis for the terms and rates of the loan. If a borrower defaults on a hard money loan, the lender collects the property.
But hard money loans are known as last resort loans for a reason — they have very high-interest rates, low LTV ratios, and short repayment periods. Hard money loans can have average interest rates of 8–15% and need to be repaid within a year, which make them good loans mostly for real estate transactions. And if the investment does not quickly generate a profit, hard money loans can be very difficult to pay off.
Also, not every hard money lender is trustworthy. Some tack on extra fees like origination fees or closing costs. Others might not be transparent about extra fees when the borrower signs off on the loan. New investors are particularly vulnerable due to only being able to negotiate with certain hard money lenders since most require a successful track record of investments.
We have you covered. At Hard Money Lenders IO, we have made a list of the best hard money lenders in Ellicott City so you can secure the deal of your dreams.