Frederick is the most famous city in West Maryland. It is an important intersection for the Appalachian Trail and also one of the biggest cities in Maryland, behind Baltimore. It is home to the largest airport in West Maryland, as well Fort Detrick, an army research base and the biggest employer in Frederick County.
Livability rated Frederick as the fourth best place to live in America in 2021. It has a rich history, streets that are very walking-friendly, and many museums and restaurants. It also is home to many wineries in the countryside, as well as several colleges and universities. While Frederick feels like a suburb, it is also an affordable place to live relative to the rest of Maryland.
Frederick is a seller’s market, and the average home sold after 48 days on the market in the past three years. It is a place where demand for housing is rapidly outpacing supply, which means it is a very competitive real estate investing market.
Hard money loans, otherwise known as last resort loans, may help an investor be competitive in the Frederick market. They are mostly used for real estate transactions and particularly are used for fix and flips, repairs for distressed properties, and repairs for foreclosures. They are also used for long-term rentals, which can be advantageous for a lot of new investors in the Frederick area.
The biggest advantage of hard money loans. is a fast speed of approval. They can be approved within a couple of days or even faster than that, compared to a traditional mortgage loan that can take over a month to be approved. The documentation required on a mortgage is extensive since a bank has to research the credit history of the borrower extensively. For hard money loans, the lender takes the property as collateral, which means the property itself is the only basis for the terms and rates of a loan (even though most hard money lenders have a minimum credit score requirement of 600 to 620). If the borrower defaults on the loan, the lender collects the property.
However, hard money loans have risks, too. They have lower LTV ratios, higher interest rates, and shorter repayment periods than traditional loans. They can be very hard to pay off if the real estate investment does not generate enough profit.
This can make hard money loans very risky for investors, and particularly for new investors. It’s important to do your research, and only trust certain hard money lenders because not every lender is trustworthy. Some may tack on extra fees or not communicate about fees.
At Hard Money Lenders IO, we have you covered. We have compiled a list of the best hard money lenders in Frederick, to help you invest and put your foot in the door in one of the best places to live in the country.
