New Haven is one of the most popular cities in Connecticut. It is home to Yale University, but New Haven is a lot more than that. It is known as the cultural capital of the state, being home to many bioscience companies and cultural attractions like the Five Mile Point Lighthouse, various museums like the Yale Peabody Museum of Natural History, and the New Haven Green. As one of the first planned cities in Connecticut, New Haven is located on the northern shore of the Long Island Sound and is part of the New York City metropolitan area.
It is the third biggest city in Connecticut, right after Bridgeport and Stamford. Yale is the biggest employer and taxpayer in the city, providing hospitals, professional services, and financial services. The Yale-New Haven Hospital accompanies Yale University as one of the top employers in the city, and the city is also home to Albertus Magnus, the University of New Haven, and Southern Connecticut State University. There is also a heavy demand for commercial real estate, with a strong rental market.
According to Niche, New Haven currently has a population of 130,331 people. It gives a mixed suburban urban feel and 72% of people in New Haven rent their homes. There is a thriving nightlife and many restaurants, coffee shops and parks, and it is home to both many young families and young professionals. New Haven has a median home value of $199,000 and a median rent of $1,196. It is also one of the most diverse cities in America.
Right now, as of April 2022, New Haven is a seller’s market. It is a place where demand is rapidly outpacing supply, and homes are selling fast and for very high prices. It is a housing bubble where real estate investors might get into bidding wars to compete for desirable properties.
In this scenario, hard money loans might be the best way to invest in real estate in New Haven. Hard money loans are otherwise known as short term bridge loans or last resort loans. Their biggest advantage in a seller’s market like New Haven is they can be approved very quickly. Hard money loans can be approved within a couple of days, which is significantly faster than traditional mortgage loans, which can take more or less a month to be approved.
Hard money loans can be approved so quickly because they’re based on the property, not the financial standing or credit score of the lender. To be clear, credit can matter — most hard money lenders don’t lend to borrowers with credit scores below 600, and new investors can leverage high credit scores to bring down interest rates.
However, hard money loans use the property as collateral. If a borrower defaults on a mortgage, the lender takes on the property, which is a significantly speedier and less expensive process than traditional mortgage lenders. If a borrower defaults on a mortgage, the bank initiates foreclosure proceedings.
As a result, hard money loans are significantly riskier than traditional mortgage loans. Hard loans have higher interest rates, shorter repayment periods, and lower LTV ratios than traditional mortgage loans. Hard money loans have interest rates anywhere between 8–15%, which is much higher than traditional mortgage loans, on average. They also have repayment periods of more or less a year, which is significantly shorter than the repayment periods of traditional mortgage loans.
It’s important to only trust the best hard money lenders, which is why we at Hard Money Lenders IO are here to help. We have researched the best hard money lenders and compiled a list for your real estate transaction.
