Norwalk is a city in Fairfield County, close to the Long Island Sound and in the larger Bridgeport-Stamford metropolitan area. It has a population of just over 90,000 people, and has a mixture of both an urban and suburban feeling. Norwalk is considered one of the best places to live in America, with the majority of residents in the town owning their homes.
Norwalk is the sixth biggest city in Connecticut, and is well known for its seafood and oysters as the “Oyster Town.” Norwalk is home to both the Norwalk Oyster Festival and the Norwalk Boat Show due to its proximity to the water, and it also has an aquarium. It is also a diverse town with thriving night life.
Right now, the median home value of Norwalk is $435,800, while the median rent is $1,685. These are both above the national average. Norwalk is also a seller’s market. This means demand is outpacing supply in Norwalk. There are more people looking to buy homes than there are homes available, and the homes that are being sold very quickly and above the listing price.
Hard money loans might be the best way to invest in real estate in the Norwalk market. Their biggest advantage in a seller’s market is their very fast speed of approval. Hard money loans can be approved in a couple of days and make a buyer instantly competitive.
This speed of approval is especially superior to the approval timeframe of a traditional mortgage loan. A mortgage can take more or less a month to be approved.
Hard money loans can be approved so much quicker than traditional financing because they’re based on a different asset — hard money loans are based on the property and the property’s after repair value, not the financial standing of the applicant. That is not to say credit score does not matter, since the majority of hard money lenders still require a credit score of 600 to 620. However, since the hard money loan takes the property as collateral, the lender takes on the property if the borrower defaults, which is a significantly faster process than the foreclosure that results from a bank foreclosing the home.
As a result, hard money loans also have plenty of risks compared to traditional financing. They have interest rates of 8–15% (which are much higher than the average mortgage, which has an interest rate just over 4%). They have repayment periods around one year, which are significantly shorter than the repayment periods of mortgages (usually 15 to 30 years). They have lower LTV ratios, requiring potential investors and buyers to put down higher down payments than traditional financing.
It’s important to be especially cautious when getting a hard money loan. Not every hard money lender is trustworthy. Some may not communicate well about fees until signing, and tack on extraneous fees like origination fees and closing costs. New investors in particular have to be careful because they have a very limited pool of hard money lenders — most hard money lenders require a successful history of fix and flips to lend. Foreign nationals also have a hard time securing hard money loans due to documentation requirements of investing in real estate in the United States.
At Hard Money Lenders IO, we have compiled a comprehensive list of the best hard money lenders in Norwalk.