Hammond is a city in Lake County, Indiana and is part of the Chicago metropolitan area. It is the biggest city in Lake County, recently replacing Gary as the biggest city in the county. Hammond is part of the Purdue University campus, and Hammond is also a city that offers residents a suburban feel. It’s a city where most people own their homes, and is home to many bars, parks, and is well known for having great nightlife.
Hammond is also known as a very diverse suburb. The median home value is $91,700 and its median rent is $879. It is located very close to Chicago, even close than Gary, and is also a very affordable suburb compared to other suburbs. It has easy access to higher education and has a thriving economy.
Hammond is a seller’s market right now. Demand is higher than supply in Hammond, and prices tend to be higher and homes sell faster. Real estate investors need to put in quick offers to be competitive within Hammond.
Hard money loans might be the answer for real estate investing in Hammond. Hard money loans are also known as short-term bridge loans or last resort loans, but they are also known for being primarily used for real estate transactions.
Their biggest advantage in a seller’s market is their fast speed of approval. Hard money loans can be approved in a couple of days, as opposed to traditional mortgage loans, which can take a month or more to be approved. This fast speed of approval is especially advantageous in a seller’s market, where buyers can get into bidding wars.
Hard money lenders have fast speeds of approval due to their basis not on the credit score of the borrower and the financial standing of the applicant, but on the after-repair value of the property. To be clear, most hard money lenders still have minimum credit scores of 600 to 620.
The property is both the asset and the collateral. If a borrower defaults on a hard money loan, the lender takes on the property, which is different from a mortgage where if the borrower defaults, very lengthy foreclosure proceedings initiate.
A hard money lender can make a lot of profit off a hard money loan, but it can also be really risky. This is shown in the rates of hard money loans. Compared to traditional loans, hard money loans have higher interest rates of 8–15%, compared to the interest rates of mortgage rates, which on average are just over 4%. They also have repayments periods of about a year, which are much shorter than 15 to 30 year mortgages. Hard money loans also have much lower LTV ratios than traditional loans.
It’s important to be cautious when working with hard money lenders. Not every hard money lender is trustworthy. Some tack on extraneous fees, while others might not communicate well about fees like underwriting fees, closing costs, and origination fees. New investors, in particular, might have a hard time investing in real estate using hard money loans because most hard money lenders require a successful history of fix and flips and other real estate transactions.
At Hard Money Lenders IO, we have made a list of the best hard money lenders in Hammond. We have done the work so you don’t have to find the best financing partners for your real estate transaction.