Passaic is a city in Passaic County with a population just over 70,000 people, making it the 16th largest municipality in New Jersey. It is the fifth most densely populated municipality in the United States with over 22,000 people per square mile. Passaic is a New York City suburb that is known for having great corner stores and great green space. It is known to be very safe and have terrific night safety.
According to Niche, Passaic has an urban suburban mix feel, and is a place where most residents rent their homes. There are many parks, restaurants, and coffee shops in Passaic and it’s a place that’s home to many families and young professionals. It has a median home value of $332,700 and a median rent of $1183, and Passaic is known for its robust night life and diversity.
Right now, Passaic is a seller’s market. It’s a place where prices tend to be higher and sell faster than listing price. Real estate investors in Passaic are getting into bidding wars over the best real estate in the state. Homes are selling fast and for higher than listing price.
Real estate investors in Passaic may be interested in hard money loans. Hard money loans are also known as short-term bridge loans or last-resort loans, but their biggest advantage in a seller’s market like Passaic is their very fast speed of approval. Hard money loans can be approved in a few days, whereas traditional mortgage loans can take a month or more to be approved. Having this very fast speed of approval is an instant competitive edge for real estate investors who are trying to bid for ideal properties.
Hard money loans are different from traditional financingbecause they use the property as the asset. Hard money loans don’t rely on the financial standing of the applicant as much as traditional mortgage loans, but they do require a minimum credit score of 600 to 620. Hard money lenders typically only count financial standing as a major factor when determining interest rates to new investors without an experience of performing fix and flips.
Hard money loans are loans mainly used for these real estate transactions of people flipping homes or turning homes into long-term rental. Hard money loans also use the property as collateral. If a borrower defaults on a mortgage, the bank initiates a lengthy and expensive foreclosure process. But if a borrower defaults on a hard money loan, the lender takes on the property.
This results in a plethora of risks and disadvantages for hard money loans as well. Hard money loans havehigher interest rates, shorter repayment periods, and lower LTV ratios than traditional mortgage loans. Hard money loans have interest rates of 8–15%, which are significantly lower than the interest rates of traditional mortgage loans. Hard money loans also have repayment periods of more or less a year, which are much shorter than the repayment periods of mortgages. Lastly, hard money loans have LTV ratios around 65–75%, which means they require great buy-in and down payments than traditional mortgage loans.
Not every hard money lender is reliable. Some hard money lenders tack on extra fees and points while signing, like underwriting fees, closing costs, and origination fees.
That’s why it’s essential to only trust the best — which is where we at Hard Money Lenders IO have you covered. Here are the best hard money lenders in Passaic.
