Germantown is another suburb in Montgomery County, and it is a rapidly growing suburb about 30 miles outside Washington D.C. Germantown is considered a great place for long-term investments and an attractive area since it gives a suburban feeling and is home to many young families and professionals. Most people in Germantown own their homes, and compared to other suburbs in the Montgomery County area, Germantown can be more affordable with its rent and home prices. This is especially true when comparing Germantown to homes in Bethesda, Rockville, or Gaithersburg.
Germantown is very diverse, and it’s also a seller’s market. More people are looking to buy homes than supply necessarily dictates at the moment. The median days of a home on the Germantown market over the last three years was 43 days.
To compete in the Germantown real estate market, hard money loans might be the answer. Hard money loans have the big advantage of fast, hard cash in a market where putting an offer down quickly is essential. They can be approved within a matter of days if not less, while traditional mortgage bank loans can take up to a month or more to be approved. This is a significant advantage because in a seller’s market, time is money.
Hard money loans can be approved so quickly and guarantee this speed and flexibility because they’re based on the property the investor wants to buy, not the borrower’s credit. Credit still matters — most hard money lenders have minimum credit score requirements. However, the hard money lender uses the property as collateral, and if a borrower defaults on property, the hard money lender collects the home in hopes that the property can pay off the hard money loan.
This makes hard money loans inherently risky. Hard money loans come with higher interest rates, lower LTV ratios, and shorter repayment periods than traditional loans. They need to be repaid sooner and are more expensive than traditional loans. If a fix and flip or rental does not pay off, it can be incredibly difficult to pay off a hard money loan.
Hard money loans are also part of an unregulated field, which means there are many untrustworthy hard money lenders out there who might scam real estate investors, especially new investors. Some may tack on extra fees like origination fees or closing costs. New investors are particularly susceptible due to most lenders requiring successful real estate investment transactions. It’s important to only trust hard money lenders that have established reputations working with investors in Germantown.
At Hard Money lenders IO, we have you covered. We have found a list of the best hard money lenders in Germantown that can help investors partner with reliable lenders to finance real estate transactions.
