Hamburg is town in upstate New York, located in Erie County. It has a population of just under 60,000 people and is just south of Buffalo. It is known as place that is known for having a lot of snow and cold weather, but is also known for being a friendly and safe environment as a suburb of the Buffalo area.
Niche says Hamburg is one of the best places to live in the state, and is a town with a suburban feel. Most people who live in Hamburg own their homes, and the town offers residents a suburban feel where there are a lot of parks and restaurants. It is home to many young families as well as young professionals, and its public schools are incredibly highly regarded within the state of New York and around the country.
Not only that, but Hamburg is very affordable compared to the rest of New York. It has a median home value of $166,100 and a median rent of $866, which is cheaper than the national average.
Right now, Hamburg is a seller’s market, which means demand is exceeding supply in the town. Hamburg is currently in a housing bubble where homes are selling fast and for higher than listing price, much like the rest of the country. It is a place where real estate investors often get into bidding wars over competitive properties.
For real estate investors, hard money loans are a way to get ahead and get an advantage in this seller’s market. Hard money loans give a huge advantage of being approved very quickly. They can be approved within a couple of days, whereas traditional mortgage loans can take more than a month to be approved.
They can be approved so quickly because they’re based on the after repair value of the property, not the financial standing of the applicant. While most hard money lenders still have minimum credit scores of 600 to 620, hard money lenders use the property as collateral. The process for when a buyer defaults is vastly different from a mortgage — in hard money loans, if a borrower defaults, the lender owns the property in a fast and expeditous process.
Hard money loans are inherently risky for both the borrower and lender as a result, which is why they have unforgiving terms and rates. Hard money loans have high interest rates, short repayment periods, and lower LTV ratios compared to traditional mortgage loans. Hard money loans have interest rates of 8–15%, which is much higher than the average mortgage which has an average interest rate just over 4%. Hard money loans also have repayment periods of more or less a year, which is much shorter than repayment periods of 30 year mortgage. Lastly, lower LTV ratios means hard money lenders typically need higher down payments than they would for mortgages.
However, it’s important to be especially selective when choosing a hard money lender. Many hard money lenders earn reputations as “loan sharks” because they tack on extra points and fees, or don’t communicate well about those fees. New investors might also have a hard time getting a hard money loan since most hard money lenders rely on experience, so they have to rely on a strong credit score to bring down interest rates.
We have you covered at Hard Money Lenders IO. Here are the best hard money lenders in Hamburg for your real estate transaction.