West Hartford (WeHa) is a town just five miles west of Hartford, and it is known as a suburb “Where City Style meets Village Charm.” It is home to many festivals and concerts and is considered one of the best places to live in Connecticut. Niche considers West Hartford the number one best place to live in Connecticut. It has great public schools, it is good for raising families, and it has terrific nightlife and diversity. It is also a college town, being home to the University of Hartford and the University of Saint Joseph.
With a population of just over 60,000, most people own their homes in West Hartford. Its median home values and rents are above the national average, but below many pricier parts of Connecticut. It is also considered one of the best suburbs for young professionals in the state. It is known for having outstanding restaurants, but property taxes in West Hartford can be very high.
Right now, West Hartford is a seller’s market. That means demand is outpacing supply in the city, and homes are selling fast and for higher than the listing price. At the moment, real estate investors might get into bidding wars to get offers in quickly.
Hard money loans might be beneficial for real estate investing in West Hartford. Hard money loans are also known as last resort loans, but they are very advantageous in seller’s markets. They can be approved within a couple of days, as opposed to traditional mortgage loans, which can take more or less a month to be approved. This fast speed of approval is integral for getting in a fast bid in a competitive market like West Hartford.
The reason hard money loans can be approved so quickly is that they’re based on the after repair value of the property, not the credit score or financial standing of the borrower. This does not mean credit score doesn’t matter: most hard money lenders require minimum credit scores of 600 to 620. However, since hard money lenders use the property as collateral, if a borrower defaults on a hard money loan, the lender takes on the property, as opposed to the lengthy and costly foreclosure proceedings that can result from defaulting on a mortgage.
As a result, hard money loans also have plenty of risks. Hard money loans are very expensive, with interest rates of 8–15%. They have shorter repayment periods than traditional mortgage loans (which usually have 15 to 30 year repayment periods): hard money loans have repayment periods of more or less a year. Hard money loans also have lower LTV ratios than traditional loans, which means the borrower has to put down a greater proportion of the down payment.
It’s important to be careful and selective when choosing a hard money lender. Some hard money lenders are not trustworthy, and have reputations of “loan sharks” for tacking on fees that are not well communicated, like origination fees, closing costs, and underwriting fees. Also, many hard money lenders don’t lend to new investors due to the requirement of a successful track record of successful investments.
At Hard Money Lenders IO, we have found the best hard money lenders in West Hartford so you don’t have to. Look no further for a financing partner for your real estate investment journey.