Valdosta, Georgia is a city located in south Georgia. It has a steadily growing population, as well as the home of Valdosta State University, a university with over 10,000 students. It is also a beautiful city otherwise known as Azalea City, highlighted by the March festival in the city.
To secure the necessary funds to purchase the property of your dreams in Valdosta, a hard money loan might help. Hard money loans can fund fix and flips, construction projects, the funding of distressed property repairs, and long-term rentals.
Credit can often be a barrier to getting a traditional loan. However, hard money loans don’t rely on credit or the borrowing history of the lender. Instead, hard money loans rely on the projected future value of the property a buyer is seeking to purchase. While most hard money lenders still require a minimum credit score of 600 to 620, the lender uses the property as collateral. If a borrower defaults on a hard money loan, the lender collects the property
However, it’s important to note hard money loans have their limitations, too, compared to traditional loans. They have lower LTV ratios, shorter repayment periods, and higher interest rates than loans from banks. A hard money loan is often seen as a last resort for a buyer without good credit, but they are used mostly for real estate transactions instead of traditional homeownership.
For real estate investors, time is often money, and the funding time frame of a hard money loan is much lower than that of traditional financing. Getting your cash faster may be integral to purchasing the home of your dreams, and many property flippers use hard money loans to renovate and resell a home for a significant profit.
If you are investing using a hard money loan, there should be a strategy for paying off the loan relatively quickly given repayment periods that usually range from one to three years. There is often more flexibility in the repayment period than with other loans. Sometimes, a hard money loan can be used to delay foreclosures while a borrower gets their finances in line.
But likewise, the speed of a hard money loan is an advantage for the borrower, but the borrower takes on significantly more risk than with a traditional loan. The borrower also, on average, needs to pay more of the cost of the home on the downpayment due to low LTV ratios.
It’s important not to just trust any hard money lender. Hard money lending is very unregulated, and some lenders may try to take advantage of new investors with high origination fees or closing costs.
At Hard Money Lenders IO, we have you covered in finding the best hard money loan with a reputable and trustworthy lender in Valdosta.