Gastonia is the largest city in Gaston County, North Carolina, and is the second-largest satellite city in the Charlotte area. It currently has a population just over 77,000 people, and Gastonia is known for being part of the Charlotte Metropolitan Statistical Area. It is known for textile manufacturing and has been associated with the labor movement historically, but now, Gastonia has diversified its economy from manufacturing into healthcare, education, government, and more.
According to Niche, Gastonia is one of the best places to live in North Carolina. It gives its residents a sparse suburban feel, and is a place where most people own their homes. Gastonia is a place with great public schools and is home to many parks and green space. It is home to both many young professionals and families, and is a place that’s also very diverse. Right now, Gastonia has a median home value of $155,200 and a median rent of $879.
Gastonia is currently a seller’s market. It’s a place where real estate investors are in a housing bubble, where they have to get into bidding wars that make homes sell faster than average and higher than listing price. There’s not enough supply to meet demand in Gastonia.
Hard money loans might be the best way to invest in real estate in Gastonia. Hard money loans are also known as last resort loans, but they are very advantageous in a seller’s market like Gastonia. They have very fast speeds of approval, and they can be approved in a couple of days, as opposed to traditional mortgage loans, which take a month or more to be approved. Hard money loans give investors an instant advantage in bidding wars, because time is money in real estate investing.
The reason hard money loans can be approved so quickly is they have a different asset than mortgages. Mortgages depend on the financial standing of the borrower, but hard money loans depend on the credit score of the borrower. It’s not like hard money loans don’t depend on credit — they have minimum credit scores of 600 to 620, and hard money loans can also have lower interest rates if an investor has a good credit score. Hard money loans also use the property as collateral. If a borrower defaults on a mortgage, the bank initiates costly foreclosure proceedings. But if a borrower defaults on a hard money loan, the lender owns the property.
This means hard money loans also come with plenty of disadvantages. They come with higher interest rates, shorter repayment periods, and lower LTV ratios than traditional mortgage loans. Hard money loans have interest rates between 8–15%, which are significantly higher than the interest rates of traditional mortgage loans. They also have repayment periods of around a year, which are much lower than the repayment periods of traditional mortgage loans. Lastly, hard money loans have LTV ratios of 65–75%, lower than the average 80% repayment period of mortgages. This means they require higher down payments from borrowers to show greater buy in.
Borrowers have to be careful about which hard money lenders they trust. Some hard money lenders have reputations as loan sharks because they tack on extra points and fees to origination fees, closing costs, and underwriting fees. Other hard money lenders don’t give to new investors at all.
That’s why we at Hard Money Lenders IO have compiled a list of the best hard money lenders in Gastonia for your real estate transaction.