Hoboken is a part of New Jersey that has affordable housing and provides renters and homeowners with great rental properties, especially when compared to every New York City borough. Hoboken has a population of just over 60,000, according to the 2020 census, and is located in Hudson County, New Jersey. It is part of the New York metropolitan area and is connected to Manhattan through the George Washington Bridge.
Hoboken is also the famous home to Frank Sinatra and Stevens Institute of Technology, one of the oldest technological universities in America.
According to Niche, Hoboken is one of the best places to live in New Jersey, and is a great place to raise a family as well as a great place to go out. It gives residents a dense urban feel, and is a location that has a lot of renters. Most people rent their homes in Hoboken. Hoboken is also home to many young professionals and young families, and public schools are above average in the town. Right now, the median home value of Hoboken is $720,700 and the median rent is $2315.
Right now, Hoboken is a seller’s market. Demand is outpacing supply, and more people want to buy homes than there are homes available. In the housing bubble across the country right now, but especially in Hoboken, real estate investors have been getting into bidding wars over the best real estate in the suburb.
Real estate investors in Hoboken should look into hard money loans. These loans are mainly used for business transactions like fix and flips, long-term rentals, and construction projects. But their biggest advantage in a seller’s market like Hoboken is their very fast speed of approval — hard money loans can give a real estate investor financing in only a couple of days, which is much faster than the financing from traditional mortgage loans. This makes a real estate investor instantly competitive.
Hard money loans are an alternative source of financing to traditional mortgage loans, and they can be approved much faster than mortgages for a plethora of reasons. First, hard money loans use the property as the asset of the loan, not the credit score of the applicant. It’s not like credit score does not matter — hard money loans require minimum credit scores around 600. But the terms and rates of a hard money loan revolve around the after repair value of the property. Since hard money loans use the property as collateral, if a borrower defaults on a mortgage, the bank forecloses on the property. But if a borrower defaults on a hard money loan, the lender takes on the property.
But it’s not all sunshine and rainbows — hard money loans are significantly riskier, more expensive, and have plenty of disadvantages compared to traditional mortgage loans as well. They have much higher interest rates, usually around 8–15%, than traditional mortgage loans. Hard money loans also have short repayment periods of more or less a year, which is much shorter than the repayment periods of a mortgage. Lastly, hard money loans have LTV ratios around 65–75%, which are much lower than the approximately 80% LTV ratios of mortgages.
It’s important not to trust any hard money lender. Some have reputations as loan sharks, and others will tack on extraneous fees or not communicate well about them.
That’s why we at Hard Money Lenders IO have compiled a list of the best hard money lenders in Hoboken. Look no further for a financing partner for your real estate transaction.