Towson is a suburb right outside Baltimore, and a desired place to live for many who may work in Baltimore City but not want to live in the city. Accessible to Baltimore through I-83, Towson touts a strong residential, suburban feeling in its own right. It is home to Towson University, a school with almost 20,000 undergraduates and one of the best universities in Maryland.
The Towson area is also home to a variety of shopping opportunities, including restaurants, coffee shops, and the famous Towson Mall. 57% of adults in Towson own their homes, while 43% of people in the city rent their homes.
Hard money loans might be your best option for real estate investing in Towson. As a growing area to live for young professionals, academics, and those working in Baltimore but who want to live outside the city, Towson is an attractive area to a diverse group of people. Hard money loans are mostly used to fund fix and flips, long-term rentals, repairs for distressed properties, and construction projects.
The biggest advantage of hard money loans is they can be approved very quickly. Hard money loans are especially advantageous for very competitive properties where you need leverage and need to get in an offer quickly. They can be approved in a couple of days due to being based on the value of the property rather than a borrower’s credit history. Compared to traditional bank mortgages, which are based on a borrower’s credit, hard money loans do not factor in credit (although most still have credit score minimums). Traditional loans can take a month or more to be approved, but hard money loans have less strict requirements and can be approved significantly faster.
However, it’s important to understand the risks of hard money loans. If a borrower defaults on a hard money loan, the lender takes on the property, which is a significant risk because the lender needs to make sure the property can pay off the loan. This means hard money loans have higher interest rates, shorter repayment periods, and lower LTV ratios than traditional loans. They require higher down payments and need to be paid off very quickly compared to traditional loans.
This also means it’s important to be especially careful with hard money lenders. Some are not trustworthy and can tack on extra fees or simply not be transparent about fees until the borrower signs on the loan. As a new investor, it may be hard to find a hard money lender to negotiate with to begin with given most require successful real estate investing histories.
At Hard Money Lenders IO, we’re here to help. Here is a list of the best hard money lenders for Towson and the surrounding area.
