Terre Haute is known as the “Queen City of the Wabash.” It is one of the biggest cities in the Wabash Valley and has a population just over 60,000. Terre Haute is known as a college town, home to Indiana State University, Rose-Hulman University, and Ivy Tech Community College of Indiana. Just to the east of the state’s border with Illinois, Terre Haute has several nicknames, including the “Queen City of the Wabash,” “The Crossroads of America,” and the “Capital of the Wabash Valley.”
Terre Haute is known for having a suburban feel and having most residents owning their homes. There are many bars and parks within Terre Haute, and public schools in the city are also very good. In Terre Haute, the median home value is $78,700 while the median rent is $731, which are both well below the national average. Terre Haute is a very affordable city as a result.
Right now, Terre Haute is a seller’s market, which means prices are high and homes are selling faster, and it also means demand is rapidly outpacing supply in Tere Haute. It means real estate investors might get into bidding wars because homes are selling so quickly.
Hard money loans might be the answer for real estate investors trying to invest in Terre Haute. Hard money loans are otherwise known as short-term bridge loans or last resort loans, but they’re mainly used for real estate transactions, and especially advantageous for a seller’s market because they have very fast speeds of approval. Many hard money lenders can be approved within a couple of days, as opposed to traditional mortgage loans which can take at least a month to be approved.
This fast speed of approval is especially beneficial in a seller’s market so a real estate investor can be competitive. The reason hard money loans can be approved so quickly is because they’re based on the property, specifically the after repair value of the property, not the credit score of the borrower. The credit score of the borrower and the financial standing of the applicant do matter a little bit — most hard money lenders require minimum credit scores of 600 to 620.
If a borrower defaults on a mortgage, there’s a foreclosure. But if a borrower defaults on a hard money loan, the lender takes on the property. Sometimes the lender can make a significant profit, but in most cases, the hard money lender needs to calculate whether the property can pay off the hard money loan.
This means there are significant risks to a hard money loan. Hard money loans have higher interest rates of 8–15% compared to traditional loans. They also have shorter repayment periods of more or less than a year, and they have lower LTV ratios. This means hard money loans are more expensive, need to be paid off faster, and require larger down payments than traditional loans. Traditional loans have interest rates just over 4% on average, repayment periods of 15 to 30 years, and higher LTV ratios than hard money loans.
However, not every hard money lender is trustworthy. Some tack on extraneous fees and others do not disclose fees until signing off on the loan.
At Hard Money Lenders IO, we have made a list of the best hard money lenders in Terre Haute.